On Friday European stock markets traded in negative territory as a reemergence of Covid-19 cases in China pulled back the positive sentiment generated by U.S. President-elect Joe Biden’s $1.9 trillion stimulus plan. The pan-European Stoxx 600 fell 0.3% in early deals, with oil and gas stocks shedding 0.8% to lead losses as all sectors and major bourses slid into negative territory.
Biden, who takes office on Jan. 20, on Thursday announced details of the American Rescue Plan, which includes increased federal unemployment payments extended through September and direct payments to many struggling Americans of $1,400.
Markets in Asia-Pacific started brightly on Friday, but tailed off by the afternoon as rising Covid-19 cases in China which have led to lockdowns in several cities, resurfaced concerns about an imminent global economic recovery. U.S. stock futures also pointed lower in the early hours of Friday morning.
Back in Europe, Italy has been plunged into political turmoil once again as former Prime Minister Matteo Renzi decided to pull his support for the current coalition government on Wednesday. Current Prime Minister Giuseppe Conte resisted calls to resign, despite being stripped of the coalition’s parliamentary majority.
The two-day special congress of Germany’s ruling Christian Democratic Union party will begin Friday, with Chancellor Angela Merkel’s successor due to be selected on Saturday. On the data front, the U.K. economy contracted by 2.6% in November as the country implemented fresh lockdown measures, according to official estimates published Friday.
This exceeded the -5.7% expected by economists polled by Reuters, but marked a first contraction since the onset of the coronavirus crisis last spring. France’s official statistics agency reported Friday that December CPI (consumer price index) inflation came in at 0.0% year on year and 0.2% month on month. Carrefour shares fell more than 5% to the bottom of the Stoxx 600 in early trade, after the French government on Thursday voiced opposition to the takeover of Europe’s largest retailer by Canada’s Alimentation Couche-Tard.