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European stocks dip with Wall Street shut for Thanksgiving

Agence France-Presse

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European stocks dip with Wall Street shut for Thanksgiving

RESTRICTIONS. A billboard displays a Manchester City Council message about the national lockdown restrictions to combat the novel coronavirus pandemic, in Manchester, England, on November 26, 2020.

Photo by Oli Scarff/AFP

London's stock market declines 0.4% on Thursday, November 26, as investors digest news on the latest COVID-19 restrictions that will be imposed

European equities dipped on Thursday, November 26, as dealers nervously eyed coronavirus restrictions in subdued trade, with Wall Street shut for the Thanksgiving holiday, dealers said.

London’s stock market declined 0.4% as investors digested news on the latest COVID-19 restrictions that will be imposed after England’s current 4-week partial lockdown ends next week. 

In the eurozone, both Paris and Frankfurt shed less than 0.1%, shrugging off a broadly positive session in Asia that followed this month’s vaccine-fueled markets rally. 

Oil prices stepped lower, while the dollar rose against the euro but fell against the yen.

“There is always a certain weariness about European markets on Thanksgiving Day, knowing that they are almost certainly condemned to a directionless session with little volume and not much movement,” said analyst Chris Beauchamp at trading firm IG.

“Even when there is [movement], it is likely to be quickly unwound once the Americans get fully back in the saddle from Monday.”

Market analyst David Madden at CMC Markets UK also noted that “traders continue to take profit from the strong gains that were posted on Tuesday.”

Most Asian stocks rose but traders moved cautiously, with an eye on rising virus infections that are forcing governments to impose containment measures across the globe.

With at least 3 breakthrough COVID-19 vaccines in the pipeline and possibly rolled out within weeks, the general mood on trading floors is upbeat for 2021.

However, a fresh batch of United States data underlined the immediate impact of the disease and the long road ahead for economies.

Minutes from the Federal Reserve’s latest policy meeting warned that the country’s recovery would be tougher without a new stimulus package.

Official figures showed new jobless applications rose for a second straight week as businesses were hit by a sharp increase in new infections and deaths that have led several major cities including New York and Los Angeles to close bars and restaurants.

Fed bond buying likely

The readings gave traders a dose of reality following weeks of fervent buying in reaction to vaccine successes and Joe Biden’s election victory. 

“The US data on Wednesday highlighted the economic fragility as the country battles an even more severe wave of COVID-19 than it was faced with earlier this year which is likely to continue to weigh in the coming weeks,” said OANDA Europe analyst Craig Erlam.

“The Fed minutes did not directly hint at more bond buying in December but given the COVID-19 spike and lack of a fiscal response, it is still looking very likely.”

Ahead of the Thanksgiving break, the Dow and S&P 500 ended lower on Wednesday, November 25, after hitting records the day before, while the Nasdaq hit a new all-time high as tech firms surged.

“It’s going to be a very quiet end to the week with the US Thanksgiving bank holiday – and extended weekend for many – leaving a massive void in the markets,” Erlam said.

“The economic calendar was front-loaded this week as a result of the holiday, leaving just a few low-impact releases over the next couple of days and no major central bank decisions.”

Key figures around 4:30 pm GMT
  • London – FTSE 100: DOWN 0.4% at 6,362.93 points (close)
  • Frankfurt – DAX 30: DOWN less than 0.1% at 13,286.57 (close)
  • Paris – CAC 40: DOWN less than 0.1% at 5,566.79 (close)
  • EURO STOXX 50: UP 0.1% at 3,516.70
  • Tokyo – Nikkei 225: UP 0.9% at 26,537.31 (close)
  • Hong Kong – Hang Seng: UP 0.6% at 26,819.45 (close)
  • Shanghai – Composite: UP 0.2% at 3,369.73 (close)
  • New York – Dow: DOWN 0.6% at 29,872.47 (close Wednesday, November 25)
  • Euro/dollar: DOWN at $1.1906 from $1.1917 at 10 pm GMT
  • Pound/dollar: DOWN at $1.3333 from $1.3380 
  • Dollar/yen: DOWN at 104.27 yen from 104.46 yen
  • Euro/pound: UP at 89.31 pence from 90.82 pence
  • West Texas Intermediate: DOWN 1.6% at $44.97 per barrel
  • Brent North Sea crude: DOWN 1.8% at $47.73 per barrel


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