By Peter Nurse
Investing.com - European stock markets weakened Wednesday, as the region’s finance ministers failed to agree on how best to finance the response to the coronavirus crisis, reviving old doubts about the long-term viability of the euro.
Markets had already opened weakly in the wake of the late drop in U.S. stocks on Tuesday, driven by unrelenting bad news regarding infection and death rates across the U.S.
At 3:55 AM ET (0755 GMT), the U.K.'s FTSE index traded 0.9% lower, France's CAC 40 was down 1.2%, while the DAX fell 0.4%. The broader based Stoxx 600 Europe index dropped 0.6%.
Eurozone finance ministers have again failed to agree on an economic package to support the region’s economy after all night talks brought no breakthrough.
The chairman of the group, Mario Centeno, said on Wednesday he was suspending the discussions until Thursday, to bridge divisions over its elements.
Officials said the deadlock was caused by a feud between Italy and the Netherlands over conditions attached to credit for governments to fight the coronavirus epidemic.
The same impasse resulted in a similar meeting failing two weeks ago, but this time the economic damage is becoming clearer. The French central bank estimated Wednesday that the country’s economy contracted 6% in the first quarter. That would be the biggest contraction on a quarterly basis since World War II.
Italy remains the epicenter of the crisis in Europe, with the highest death toll - more than 17,000; next comes Spain, with over 14,000 deaths, according to data from Johns Hopkins University.
In corporate news, shares in Tesco (LON:TSCO) fell 2.3% after Britain’s biggest retailer said it expected to take a hit of up to 925 million pounds ($1.1 billion) from coronavirus-related costs.
Shares in Givaudan (SIX:GIVN) fell just 0.4%, outperforming the wider market, after the Swiss perfume company said Wednesday that sales rose in the first quarter, recording solid growth across all its regions.
There's little in terms of European data due Wednesday, but of interest will be minutes of the meetings at which the Federal Reserve took decisive action to combat the coronavirus threat. The minutes are due for release at 14:00 ET (1800 GMT).
Oil prices have been volatile of late, and pushed higher during European hours after dropping sharply overnight as traders were kept in limbo on the possibility of production cuts.
Ahead of the meeting, the EIA will issue its weekly U.S. oil inventory numbers at 10:30 AM ET (14:30 GMT), with analysts looking for a rise of about 9.3 million barrels for the week ended April 3.
At 2:55 AM ET, U.S. crude futures traded 4.6% higher at $24.62 a barrel. The international benchmark Brent contract rose 1.4% to $32.33.
Elsewhere, gold futures rose 0.3% to $1,688.80/oz, while EUR/USD traded at 1.0848, down 0.4% on the day.