By Peter Nurse
Investing.com - European stock markets weakened Thursday, as investors take some profits after this week’s strong gains, mindful of the fact that the timeframe for getting effective vaccines distributed still leaves the Covid-19 virus plenty of time to hurt the economy still further.
At 3:40 AM ET (0740 GMT), the DAX in Germany traded 0.7% lower, the CAC 40 in France fell 0.7%, while the U.K.'s FTSE index dropped 0.8%.
Global stock markets have soared this week following the positive vaccine news from U.S. pharmaceutical giant Pfizer (NYSE:PFE) and German partner Biontech. However, some of this optimism is starting to wane as the number of Covid-19 cases throughout Europe showing no signs of slowing down.
European Central Bank President Christine Lagarde cautioned Wednesday over expecting too much too soon from a Covid-19 vaccine.
“While the latest news on a vaccine looks encouraging, we could still face recurring cycles of accelerating viral spread and tightening restrictions until widespread immunity is achieved,” Lagarde said at the ECB Forum on Central Banking.
Economic data Thursday showed the U.K. economy grew by 15.5% in the July-September quarter, a rebound of sorts from the record-breaking fall of 19.8% between April and June. However, growth slowed to 1.1% in September, from August’s 2.1%, suggesting more tough times to come.
In corporate news, German engineering group Siemens (DE:SIEGn) stock fell 4.5% despite reporting better-than-expected profit at its industrial business, while Deutsche Telekom (OTC:DTEGY) rose 0.8% after raising its earnings guidance, lifted by outperformance at its recently-merged U.S. unit T-Mobile.
In the U.K., luxury fashion group Burberry (LON:BRBY) rose 4.4% after saying it would push its prices up after its sales nearly returned to pre-pandemic levels in its fiscal second quarter, while insurer and asset manager Legal & General (LON:LGEN), down 2.8%, disappointed with its new dividend policy, which will focus more on strengthening the company's balance sheet.
Oil prices consolidated Thursday, after recent string gains on the back of news of a potential coronavirus vaccine and signs of falling U.S. crude inventories.
Traders are also now looking for the major oil producers, a group known as OPEC+, to maintain supply curbs. OPEC+ meets at the end of the month to discuss a supply increase of 2 million barrels per day scheduled for January, amid growing expectation that the move will be postponed.
The U.S. Energy Information Administration's crude oil supply data, due later in the day, will also be of interest.
U.S. crude futures traded 0.3% lower at $41.34 a barrel, while the international benchmark Brent contract fell 0.3% to $43.69. Both contracts are up more than 12% this week.
Elsewhere, gold futures rose 0.2% to $1,865.05/oz, while EUR/USD traded 0.1% higher at 1.1787.