Stocks in Europe fell on Wednesday after marathon talks among eurozone leaders failed to produce agreement on further coronavirus stimulus measures.
The pan-European STOXX 600 index (^STOXX) fell by more than 0.8% after Mario Centeno, who chairs the 19-member group, said that discussions would resume on Thursday.
“After 16 hours of discussions we came close to a deal but we are not there yet,” Centeno said in a tweet on Wednesday morning.
Stocks in the US climbed amid reports that the Trump administration is prepping plans to reopen the country’s economy.
European leaders were unable to agree on the conditions for new lending from the European Stability Mechanism (ESM), the common currency area’s bailout fund.
According to reports, the Netherlands continues to insist on strict rules and fiscal targets for the borrowing, putting it at loggerheads with crisis-hit countries like Spain and Italy, who want lending rules to be significantly relaxed.
“The meeting was supposed to be about arriving at a roadmap for an exit strategy from coronavirus later today, which would include how to unlock the power of the European Stability Mechanism, the EU’s bailout fund to help those most affected by the pandemic,” said Michael Hewson, the chief market analyst at CMC Markets UK.
There was also continued disagreement about so-called coronabonds, with countries such as Italy, France, Spain, Ireland, and Luxembourg pushing for leaders to agree to work towards the issuance of joint debt among eurozone countries.
“France, Spain and Italy want to make progress on plans for a joint debt instrument. However, the more fiscally conservative countries like Germany are more skeptical, and reluctant to sign blank cheques,” said Hewson.
The lower open in Europe followed a weak trading session in Asia.
While Japan’s Nikkei (^N225) rose by around 2.1% after prime minister Shinzo Abe unveiled coronavirus measures that were less restrictive than expected, the KOSPI Composite Index (^KOSPI) in South Korea closed 0.9% in the red.
Meanwhile, Australia’s ASX 200 (^AXJO) fell by more than 0.8%.
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