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European stocks pull back despite UK COVID vaccine approval

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read

WATCH: UK approves Pfizer-Biontech coronavirus vaccine rollout

European and US stocks fell on Wednesday morning, as investors banked some of the gains made in previous sessions.

Bourses opened lower across the continent, with North American indexes following their lead later in the day.

Germany’s DAX (^GDAXI) was down 0.3% by mid-morning, the CAC 40 (^FCHI) fell 0.2% in France, and the FTSE MIB (FTSEMIB.MI) shed half a percent in Italy.

In the US, the S&P 500 (^GSPC) was down 0.4% shortly after the open in New York, while the Dow Jones (^DJI) fell 0.6% and the Nasdaq (^IXIC) lost 0.8%.

The pullback came after a strong session on Tuesday and a bumper month. The FTSE 100 (^FTSE) enjoyed its strongest rally in 30 years in November, with other indexes enjoying similar feats.

“The equity market rally, which is fuelled by vaccine hope, is taking a breather today,” said Naeem Aslam, chief market analyst at Avatrade. “Basically, investors are trying to place their bets more carefully.”

The FTSE was the best performing index on Wednesday. Sentiment was helped by news that the UK has become the first major western nation to approve a COVID-19 vaccine and confirmation of the end of a month-long lockdown across England. The FTSE rose 0.2%.

READ MORE: UK approves BioNTech and Pfizer’s COVID-19 vaccine for use 'from next week'

“European markets are replicating the kind of meagre gains seen throughout the Asian session overnight, with news that the UK could begin vaccination next week doing little to lift spirits,” said Joshua Mahony, senior market analyst at IG.

COVID-19 vaccination in the UK will begin from next week. Photo: Kirsty Wigglesworth/AP
COVID-19 vaccination in the UK will begin from next week. Photo: Kirsty Wigglesworth/AP

Asian markets were muted overnight after the New York Times reported that US president elect Joe Biden did not intend to immediately remove tariffs on China.

Japan’s Nikkei (^N225), the Hong Kong Hang Seng (^HSI), and the Shanghai Composite (000001.SS) all traded flat, while the Shenzen Component (399001.SZ) rose just 0.2%. South Korea’s KOSPI (^KS11) was the notable exception, rising 1.6%.

Supermarket stocks came under pressure in the UK after Tesco (TSCO.L) announced it would pay the government over half a billion pounds to make up for tax relief it received during the pandemic. The move puts pressure on rival to follow suite. Sainsbury’s (SBRY.L) share fell to the bottom of the FTSE 100, down 3.7%, and Morrisons (MRW.L) dropped 1.9%.

WATCH: UK clears Pfizer-BioNTech COVID-19 vaccine