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Coronavirus: European stocks fall as pessimism about recovery takes hold

Edmund Heaphy
Finance and news reporter
Stocks in Europe declined as investors assessed the potential recovery from the coronavirus crisis. Photo: Daniel Sorabji/AFP via Getty Images

Stocks in Europe fell on Wednesday as pessimism about the pace of the economic recovery from the coronavirus crisis took hold in financial markets.

The pan-European STOXX 600 index (^STOXX) fell by around 0.2%, while London’s FTSE 100 (^FTSE) declined by 0.25% ahead of chancellor Rishi Sunak’s summer statement.

Germany’s DAX (^GDAXI) fell by around 0.1%, while France’s CAC 40 (^FCHI) was more than 0.5% in the red.

Investors were looking specifically at the potential for further lockdown measures across the world, especially after the imposition of a hard border between two Australian states.

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“It’s not the case that numbers and a return to stricter measures in and of themselves that are bothering investors, but rather the dampening effect they will have on the chances of a swift and sturdy global economic recovery,” said Connor Campbell, a financial analyst at trading platform Spreadex.

In Asia, stocks broadly declined, even as the market rally in China continued.

In recent days, state-run media in the country has encouraged retail investors to buy stocks in order to reap the benefits of the coronavirus recovery.

Shanghai’s SSE Composite Index (^SSEC) rose by more than 1.7% on Wednesday, recording its seventh straight day of gains. The CSI 300 Index (^CSI300), which combines shares listen in Shanghai and Shenzhen, rose by more than 1.6%.

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The Hang Seng (^HSI) was 0.36% in the green in Hong Kong.

Japan’s Nikkei (^N225) declined by almost 0.8%, while the KOSPI Composite Index (^KOSPI) in South Korea closed more than 0.2% in the red. Australia’s ASX 200 (^AXJO) fell by around 1.5%.

Futures were pointing to a higher open for US stocks on Wednesday.

S&P 500 futures (ES=F) rose by around 0.3%, while Dow Jones Industrial Average futures (YM=F) rose by 0.2%. Nasdaq futures (NQ=F), meanwhile, rose by around 0.3%.