Shares steady with U.S. bank earnings in sight
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[October 14, 2020]
By Carolyn Cohn
LONDON (Reuters) - European shares held
steady on Wednesday, underpinned by gains for Wall Street futures,
following losses the day before on vaccine trials and a stimulus
impasse, while the dollar was also stable.
The pan-European STOXX 600 <.STOXX> was unchanged in early trading, and
markets in Frankfurt <.GDAXI>, London <.FTSE> and Paris <.FCHI> were
steady to higher.
Markets had little direction as they grappled with "angst about
vaccine/antibody delays, angst about rising covid cases in Europe,
stalled U.S. fiscal talks, stalled Brexit trade talks", said Kit Juckes,
macro strategist at Societe Generale.
Wall Street futures <ESc1> were up 0.4%, however, with U.S. banks
Goldman Sachs <GS.N>, Wells Fargo <WFC.N> and Bank of America <BAC.N>
scheduled to report results on Wednesday, following above-estimate
earnings from JPMorgan <JPM.N> and Citigroup <C.N> in the previous
session.
Stock market losses began on Wall Street Tuesday when Johnson & Johnson
<JNJ.N> said it was pausing a COVID-19 vaccine trial after a study
participant suffered an unexplained illness.
Eli Lilly and Co <LLY.N> later said it too had paused the clinical trial
of its COVID-19 antibody treatment because of a safety concern, leading
the U.S. equity market to deepen losses.
J&J shares lost 2.3%, and Eli Lilly closed down nearly 3%.
Hopes for the passage of a new coronavirus relief package also faded as
U.S. House Speaker Nancy Pelosi rejected a $1.8 trillion relief proposal
from the White House.
"U.S. stimulus talks are still going nowhere, dimming the prospect of a
new round of support this side of the election," said Sydney-based NAB
strategist Rodrigo Catril.
In addition, investors are watching tensions between the European Union
and Britain after the EU demanded "substantive" movement on Tuesday on
fisheries, dispute settlement and guarantees of fair competition in
their talks on a post-Brexit trade deal.
Sterling declined the most among major currencies, down 0.4% against the
euro <EURGBP=>, the dollar <GBP=D3> and yen <GBPJPY=>. EU leaders will
hold a summit in Brussels on Thursday and Friday to assess progress.
Euro zone August industrial production data is due on Wednesday.
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Pedestrians pass the London Stock Exchange in London, Britain August
15, 2017. REUTERS/Neil Hall
BREATHER
Oil slipped on concerns that fuel demand will continue to falter on
concern rising coronavirus cases across Europe and in the United
States, the world's biggest oil consumer, will impede economic
growth.
Brent <LCOc1> and U.S. crude <CLc1> were off around 0.5% at $42.24
and $39.97 a barrel, respectively.
The U.S. dollar was steady after its best day in three weeks on
Tuesday, when its index <=USD> against a basket of six major
currencies rose 0.5%. The index was last 0.1% higher at 93.62. The
euro <EUR=> was barely changed at $1.1734.
Government bonds were also seeing small moves <DE10YT=RR>
<US10YT=RR>, though German bund yields, which move inversely to
prices, dipped to their lowest since May [EUR/GVD]. Gold, another
safe haven, picked up 0.26% <XAU=>.
MSCI's broadest index of Asia-Pacific shares outside of Japan
<.MIAPJ0000PUS> had tracked Wall Street's losses overnight to end a
seven-day rally.
The index was last down 0.25%, having toppled from a
two-and-a-half-year high of 588.76 touched on Tuesday. Chinese
shares <.CSI300> closed down 0.7%.
(Reporting by Carolyn Cohn, Swati Pandey and Marc Jones, editing by
Larry King)
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