Yahoo Finance Muted end to the week for European stocks as caution creeps in
Watch: FTSE 100 slips as caution creeps into market
European stock markets had a muted end to the week on Friday, with analysts pointing to concerns about the COVID-19 pandemic and the future path of vaccines.
Stocks on the continent were trading marginally higher for much of the day but the FTSE 100 (^FTSE) in London spent most of the session in the red. London’s blue chip index closed barely higher.
In the UK, prime minister Boris Johnson on Thursday said England’s current lockdown would end on 2 December. However, he confirmed tough restrictions would replace lockdown across much of the country. The chief executive of pub chain JD Wetherspoon (JDW.L) accused the government of introducing a “stealth” lockdown.
“This end of week caution appears to be predicated on concern over the short-term economic outlook, as the extension of tighter restrictions on economic activity in France, Germany and the UK creates further uncertainty over the potential for permanent economic scarring as we head into 2021,” said Michael Hewson, chief market analyst at CMC Markets.
A positive open for US markets helped turn things around and the FTSE 100 ended up 0.2%. The DAX (^GDAXI) gained 0.5% in Frankfurt and the CAC 40 (^FCHI) rose 0.8% in Paris.
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Stocks around the world have rallied strongly in recent weeks, boosted by positive news about potential COVID-19 vaccines. Vaccine breakthroughs prompted a historic rotation away from growth and momentum stocks towards value investments like banks and insurance companies.
Caution has begun to creep into the market in recent sessions. The COVID-19 second wave continues and questions have been raised about the reliability of AstraZeneca’s (AZN.L) vaccine data.
“Traders have started to reassess the risk associated with coronavirus,” said Naeem Aslam, chief market analyst at Avatrade. “Higher stock valuations also aren’t aiding the above situation.”
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After a day off for Thanksgiving on Thursday, US stock markets reopened with positive momentum. The S&P 500 (^GSPC) rose 0.3%, while the Dow Jones (^DJI) rose 0.1% and the Nasdaq (^IXIC) climbed 0.9%. Markets were operating at reduced hours on Friday.
Asian markets rose overnight. The Hong Kong Hang Seng (^HSI) and Japan’s Nikkei (^N225) both gained 0.4%, while the Shanghai Composite (000001.SS) in China rose 1.1% and the Shenzen Component (399001.SZ) gained 0.7%. South Korea’s KOSPI (^KS11) rose 0.3%.
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