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Investing.com – European stock markets sold off Thursday, consolidating after recent strong gains ahead of the latest meeting of the European Central Bank.
At 3:55 AM ET (0705 GMT), the DAX in Germany traded 0.4% lower, France’s CAC 40 fell 0.2%, while the U.K.’s FTSE index was down 0.2%.
Stock markets have been on a roll of late, fueled by investor optimism over the global economic recovery from the coronavirus outbreak amid record stimulus measures from governments and central banks.
Late Wednesday the German government announced its second stimulus package since the start of the pandemic. The new package includes a temporary cut in VAT and one-off handouts for parents of children but does not include direct aid for the car industry, except in the form of grants for smaller electric vehicles and charging stations.
This has prompted some selling in the German autos sector Thursday, with Daimler (DE:DAIGn) down almost 4%, while Volkswagen (DE:VOWG_p) and BMW (DE:BMWG) dropped over 2%.
Attention will turn to the European Central Bank meeting later Thursday, with the central bank widely expected to ramp up its stimulative bond purchases to support the region’s battered economies.
The ECB will also publish its new economic forecasts. Data this week suggest the economy may already have bottomed but risks to the recovery remain in the form of a second wave of Covid-19 infections and Sino-U.S. tension that may lead to another damaging trade war.
The ECB delivers its policy decision at 1145 GMT and ECB President Christine Lagarde holds a news conference at 1230 GMT.
In corporate news, French spirits company Remy Cointreau (PA:RCOP) gained over 6% after saying it expected a strong recovery in the second half of the year, despite seeing operating profit falling by 45-50% in the first half of its 2020/21 fiscal year.
HSBC (LON:HSBA) dropped 0.9% and Standard Chartered (LON:STAN) fell 0.4% after the two Asia-focused U.K. banks backed China’s imposition of a national security law on Hong Kong, placing them on collision course with the U.K. government.
Oil prices slipped lower Thursday on concerns that major producers will be unable to agree to extend the record level of output cuts that have supported the recent gains.
Also weighing on prices was the release of the Energy Information Administration data late Wednesday, which showed gasoline and distillate stocks rising by much more than expected.
At 3:55 AM ET, U.S. crude futures traded 1.7% lower at $36.64 a barrel. The international benchmark Brent contract fell 1.4% to $39.24.
Elsewhere, gold futures were flat at $1,705.10/oz, while EUR/USD traded at 1.1201, down 0.3%.
