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Investing.com – European stock markets traded lower Tuesday, amid worries the second wave of coronavirus cases hitting the continent will have an adverse impact upon the region’s nascent economic recovery.
At 3:50 AM ET (0750 GMT), the DAX in Germany traded 0.4% lower, the CAC 40 in France fell 0.5%, while the U.K.’s FTSE index dropped 0.4%.
Official data showed that U.K. unemployment started to grow even before the government imposed new restrictions to control the coronavirus. The number of redundancies increased by 227,000 in the June-August period, the most since 2009, the Office for National Statistics said Tuesday, while the unemployment rate rose to 4.5%, the highest since 2017.
This news resonates as a number of European countries have posted record increases of Covid-19 cases in recent days, forcing authorities to adopt stringent localized restrictions, such as those imposed in parts of the U.K. on Monday. This tends to suggest many more job losses are likely in the coming months.
Adding to the negative tone was the news late Monday that Johnson & Johnson (NYSE:JNJ) paused its Covid-19 vaccine candidate clinical trials due to an unexplained illness in a study participant.
J&J’s move follows a similar one by AstraZeneca (NYSE:AZN), which paused late-stage trials of its experimental coronavirus vaccine, developed with the University of Oxford, in September. Although clinical trials have resumed in the U.K. and a number of other countries, AstraZeneca’s trials have yet to resume in the U.S.
Wall Street closed with strong gains Monday amid confidence that a clear-cut election victory for Democratic candidate Joe Biden – implicit in most of the recent polls – will pave the way for a comprehensive recovery package in January.
In corporate news, Airbus (PA:AIR) stock dropped 3.5% after JPMorgan (NYSE:JPM) downgraded its investment stance on the aircraft manufacturer to underweight, citing a more cautious view on air travel in 2021. It cut its view on Airbus deliveries next year by 10%.
Rolls-Royce (LON:RR) , which makes engines for the likes of Airbus, slumped 7.5%. The troubled manufacturer had posted strong gains on Monday, with investors reacting well to the multibillion-pound rescue package announced last month.
Oil prices pushed higher Tuesday, recovering after losses of just under 3% during the previous session, but excess output continues to plague the market along with ever-rising Covid-19 numbers hurting global demand.
A slow economic recovery from the pandemic threatens to delay a full rebound in world energy demand to 2025, the International Energy Agency said on Tuesday.
U.S. crude futures traded 0.4% higher at $39.59 a barrel, while the international benchmark Brent contract rose 0.4% to $41.88.
Elsewhere, gold futures fell 0.3% to $1,924.15/oz, while EUR/USD traded 0.2% lower at 1.1785.
