European stock markets cautiously pull back on US stimulus package


The main European stock indexes ended Thursday (6) falling, on a day of limited risk appetite in global markets. Investors continue to monitor the troubled negotiations between Republican and Democratic lawmakers over a new fiscal stimulus package in the United States, which is seen by analysts as key to supporting the recovery of the world’s largest economy.

In addition, corporate results from large companies on the continent have also contributed to the pessimism observed in European markets today.

The Stoxx 600 Europe index ended the day down 0.73% to 362.49 points. Frankfurt’s DAX fell 0.54% to 12,591.68 points, while Paris’s CAC 40 lost 0.98% to 4,885.13 points. In Milan, the FTSE MIB fell 1.34%, to 19,475.15 points, while in Madrid, the IBEX 35 closed down 1.16%, to 6,957.90 points.

London’s FTSE 100 closed the day down 1.27% to 6,026.94 points. On Thursday, the central bank of England (BoE) kept interest rates stable at zero and did not increase the size of its asset purchases, noting that some high-frequency data showed a strong recovery, such as spending consumers and the housing market.

Although the BoE has recognized that business investment remains low and bankruptcies may still increase, following the impact of the COVID-19 pandemic, the monetary policy committee has refrained from suggesting that negative rates may be on the way to the UK.

The announcement gave strength to the pound, which, in the early afternoon of Thursday, rose 0.41% against the dollar, to $ 1.3165. The currency’s appreciation is usually negative for the British stock index, which is largely made up of exporting companies that benefit from the fall in the pound.

In the United States Congress, parliamentarians are still struggling to reach an agreement on a new round of emergency aid for unemployed Americans. Senate majority leader Republican Mitch McConnell and House Speaker Democrat Nancy Pelosi told CNBC they remain optimistic about a deal. Democrats and Republicans are running to resolve their differences until this Friday (7).

On the corporate news, Deutsche Lufthansa’s shares fell 1.22% on the Frankfurt Stock Exchange after the German airline hit its biggest quarterly loss ever, as travel demand declined with the pandemic. The company said it does not expect passenger demand to return to pre-crisis levels caused by the new coronavirus before 2024.

Mining company Glencore’s shares fell 8.08% in London after the company reduced its dividend in 2020 by recording a net loss of $ 2.6 billion in the first half of the year. The loss was driven by lower commodity prices.