By Peter Nurse
Investing.com - European stock markets traded lower Thursday, as investors reacted to the sudden selloff on Wall Street overnight.
At 4:05 AM ET (0905 GMT), the DAX in Germany traded 1.7% lower, the CAC 40 in France fell 0.9% and the U.K.'s FTSE index dropped 1.4%.
The mood in European markets has also been affected by the slow rollout of Covid-19 vaccines as well as the mobility restrictions to combat the virus.
Both the U.K. and Germany are preparing entry restrictions for travelers from certain parts of the world, while Germany’s health minister expects the current shortage of coronavirus vaccines to continue well into April.
Britain has begun a vaccination program aimed at delivering shots to 15 million people in priority groups by the middle of February, but similar programs in large parts of the European Union have made less progress. The issue has been exacerbated by drug giants AstraZeneca (NASDAQ:AZN) and Pfizer (NYSE:PFE) both announcing delivery hold-ups in recent weeks.
The sharp selloff on Wall Street overnight has dominated sentiment, as hedge funds liquidated positions to raise funds after suffering losses on short positions in other stocks, amid highly speculative retail buying. The European stocks caught up in short squeezes in recent days showed signs of normalizing on Thursday, with Varta, Evotec and CD Projekt all coming off their highs. Nokia (NYSE:NOK) stock, which had risen 30% so far this week, was also down by 2.7%.
Europe's earnings season continues, with mixed results.
Diageo (LON:DGE) stock jumped 3.4% after the world's largest spirits maker reported a surprise rise in underlying net sales growth in the first half of the year, helped by strong U.S. demand. Fevertree Drinks (LON:FEVR) stock also rose 3.0% as the same factors lifted demand for its mixers.
Bankia (MC:BKIA) stock rose 2.1% despite the Spanish bank’s net profit halving last year as it set aside more than half a billion euros in extraordinary provisions to weather the pandemic.
On the flip side, easyJet (LON:EZJ) stock fell 1.2% after the budget airline’s revenue for its fiscal first quarter fell by 88% due to the coronavirus restrictions.
Oil prices slipped Thursday, as worries over weakening demand due to travel restrictions overshadowed a large fall in U.S. crude stockpiles. China, the largest importer of crude, is facing a rise in coronavirus cases as it heads into the Lunar New Year holiday, usually its busiest period of the year for travel.
The Chinese Ministry of Transport has forecast the number of trips that will be taken will be up 15% from last year, when the virus was raging, but down 40% from 2019.
U.S. oil inventories dropped by 9.9 million barrels, the most since July, to their lowest since March, the Energy Information Administration reported on Wednesday.
U.S. crude futures traded 0.7% lower at $52.50 a barrel, while the international benchmark Brent contract fell 0.6% to $55.20.
Elsewhere, gold futures fell 0.4% to $1,837.60/oz, while EUR/USD traded 0.1% lower at 1.2102.