European Shares Set To Fall As Stimulus Hopes Fade

European stocks look set to drift lower on Thursday as investors fret over the global spread of coronavirus pandemic and diminishing prospects for more economic stimulus out of Washington.

The overall number of global coronavirus cases increased to 41.1 million as of Thursday morning, while the deaths have soared to more than 1,130,400, according to the Johns Hopkins University.

Brazil’s President Jair Bolsonaro said on Wednesday that his government will not buy the experimental coronavirus vaccine developed by China’s Sinovac Biotech, adding that the vaccine has not yet completed testing, which is the case with all potential vaccines for the virus.

In another development, a Brazilian volunteer, who participated in a clinical trial of Oxford-AstraZeneca’s potential Covid-10 vaccine, has died, Brazilian health authority Anvisa said.

Uncertainty surrounding the coronavirus stimulus bill also dented sentiment after U.S. President Donald Trump accused Democrats of being unwilling to craft an acceptable compromise on stimulus.

“Just don’t see any way Nancy Pelosi and Cryin’ Chuck Schumer will be willing to do what is right for our great American workers, or our wonderful USA itself, on Stimulus,” Trump posted to Twitter.

Federal Reserve Governor Lael Brainard said on Wednesday that further targeted fiscal support will be needed alongside accommodative monetary policy to turn the K-shaped recovery into a broad-based and inclusive recovery.

Asian markets followed Wall Street lower amid fading hopes for a U.S. fiscal stimulus deal. The dollar strengthened while gold retreated from a more than one-week high hit in the previous session.

Oil added to heavy losses overnight after a build in U.S. gasoline inventories pointed to a deteriorating outlook for fuel demand.

In economic releases, Germany’s Gfk consumer confidence data is due later in the day. The forward-looking consumer sentiment index is seen at -2.8 in November versus -1.6 in October.

Across the Atlantic, trading may be impacted by reaction to reports on weekly jobless claims, existing home sales and leading economic indicators.

U.S. stocks edged lower overnight as Senate Democrats blocked Republicans’ $500 billion so-called “skinny bill” and White House chief of staff Mark Meadows noted that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin “still have a ways to go” before finalizing a deal.

The Dow Jones Industrial Average dropped 0.4 percent, the tech-heavy Nasdaq Composite eased 0.3 percent and the S&P 500 slid 0.2 percent.

European stocks closed lower for the third day running on Wednesday as concerns of a virus-driven double-dip overshadowed optimism over the possibility of the U.K. and the EU achieving a trade deal.

The pan European Stoxx 600 shed 1.3 percent. The German DAX tumbled 1.4 percent, France’s CAC 40 index lost 1.5 percent and the U.K.’s FTSE 100 gave up 1.9 percent.

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