By Peter Nurse
Investing.com - European stock markets largely weakened Monday, weighed by news of fresh lockdowns in the region and uncertainty over the U.S. election, overshadowing strong economic data from China.
At 4:40 AM ET (0840 GMT), the DAX in Germany traded 0.1% lower, the CAC 40 in France fell 0.2%, while the U.K.'s FTSE index dropped 0.1%.
The U.K. became the latest European country to reenter lockdown over the weekend, instituting a one-month stay-at-home policy for all of England to start Thursday, with the exception of schools, universities and essential stores, as the number of Covid-19 cases affecting its population surpassed one million.
Germany and France imposed similar partial shutdowns last week, as European leaders desperately seek to halt the surge in the virus before the holiday season at the end of the year.
However, these new measures risk sending the region’s economy back into recession just as a recovery looked in sight. As such, the final Eurozone manufacturing PMI at 4 AM ET (0900 GMT) may represent an interim high point in the current cycle.
There has been some good news Monday, with data from China showing factory activity expanded at its fastest pace in a decade. The Caixin manufacturing Purchasing Managers Index for October rose to 53.6, as the second-largest economy in the world recovered strongly from its virus-induced slowdown. The Spanish and French manufacturing PMIs also showed an improvement.
That said, trading ranges are likely to be tight Monday as the U.S. presidential election draws near. Democrat Joe Biden still maintains a comfortable lead over incumbent president Donald Trump in the national polls, but the polling in key swing states tends to be a lot closer, according to a WSJ-NBC poll.
In corporate news, Ocado (LON:OCDO) stock rose 6.6% after the retailer lifted its guidance for the year and announced two tech acquisitions, moving beyond the grocery sector.
On the flip side, Ryanair (LON:RYA) stock fell 2.5% after the budget airline revealed it carried 80% fewer passengers over the first half of its financial year, while posting a loss for the period.
Rival easyJet (LON:EZJ) stock fell 6.3%, with the industry hit hard by the new lockdowns in the region. CEO Johan Lundgren stated over the weekend that the airline was considering options to bolster its finances.
Oil prices slumped Monday, with more lockdowns in Europe adding to fears that global demand will be severely hit by the second wave of coronavirus cases hitting the northern hemisphere.
Add in uncertainty surrounding the U.S. presidential election as well as the fact Libya’s oil production is rising rapidly toward one million barrels a day, and the outlook looks grim for the crude markets.
U.S. crude futures traded 3.8% lower at $34.42 a barrel, while the international benchmark Brent contract fell 3% to $36.78, hitting their lowest levels since May.
Elsewhere, gold futures rose 0.1% to $1,882.55/oz, while EUR/USD traded 0.2% lower at 1.1626.