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Investing.com – European stock markets traded lower Wednesday, as investors worried that a tightly fought U.S. presidential election will not result in an immediate clear cut victory, potentially prompting a prolonged legal battle and continued uncertainty.
At 4:40 AM ET (0840 GMT), the DAX in Germany traded 1.1% lower, the CAC 40 in France fell 0.3%, while the U.K.’s FTSE index dropped 0.2%.
President Donald Trump and his Democratic challenger Joe Biden are currently locked in a tight race for the White House.
Trump has effectively won Florida, Iowa and Ohio, critical battleground states, yet Biden looks to have claimed Arizona, a state the current president claimed four years ago. Several key states, including Michigan, Pennsylvania and Wisconsin, are still counting, and that could take some time due to the unprecedented number of mail-in votes.
Yet, despite this uncertainty, Trump has claimed victory and threatened action in the Supreme Court to curtail the vote counts in those important swing states.
“We will win this, and as far as I’m concerned, we already have won it,” Trump told supporters at an event that – in defiance of tradition – was held at the White House.
“This very close outcome brings back the risk of a contested election or one – like that seen in 2000 – which could be decided by the courts,” said analysts at ING, in a research note.
In addition, it looks increasingly unlikely that the Democrats will regain control of the Senate, suggesting that Congress will remain split between the two big parties.
This is the result the market didn’t want to see, as it threatens paralysis in Washington, with little hope of the U.S. economy receiving the additional stimulus that the step up in coronavirus cases suggests it needs.
Aside from the U.S. election news, China’s services sector saw a sixth consecutive month of growth in October, as the world’s second largest economy continues to rebound strongly from its coronavirus hit.
This is good news with the European equivalent figures are due for release later Wednesday. But with the region suffering badly from the second wave of the Covid-19 virus, these strong figures are unlikely to be matched.
In corporate news, BMW (DE:BMWG) stock fell 2.2% despite the German car manufacturer saying its third-quarter profit rose almost 10% thanks to rebounding Chinese demand for luxury cars.
Marks and Spencer (LON:MKS) stock rose 3.2% despite the iconic U.K. retailer reporting its first pretax loss in nearly 100 years, as it said its new partnership with online outlet Ocado (LON:OCDO) has started well.
Oil prices pushed higher Wednesday, with news that U.S. inventories dropped sharply last week, according to industry data, helping to counter worries about uncertainty over the election and rising coronavirus cases.
U.S. crude futures traded 0.3% higher at $37.77 a barrel, while the international benchmark Brent contract rose 0.5% to $39.91.
Elsewhere, gold futures fell 0.7% to $1,895.65/oz, while EUR/USD traded 0.2% lower at 1.1688.
