European Stock Markets Retreat After a Sharp Wednesday Rally
European stock markets fail to extend the yesterday gains despite optimism over the coronavirus vaccine. Biotech group Moderna claims that its coronavirus vaccine has produced great results in developing a robust immune-system response and they say the study is moving into the key clinical trial in July.
Positive reports related to the University of Oxford vaccine which is supported by AstraZeneca may be released soon.
The Stoxx Europe 600 jumped close to 1.9% on Wednesday after generating a small loss on Tuesday. The German index soared 1.84% and the FTSE 100 grew 2% in Wednesday trading.
“Although a mismatch between financial markets and the real economy remains in full effect, the removal of a single recessionary input (the virus) via a vaccine can pave the way for fast economic recovery,” said Stephen Innes, chief global markets strategist at AxiCorp.
Traders could show concerns over the U.S. President Donald Trump’s strict stance for China. On Wednesday, he has imposed sanctions on China as he blames China for interfering with Hong Kong’s internal affairs. Trump also provided a special status to Hong Kong in an executive order.
Shares in Asia responded to Trump’s strategy. Asia-Pacific exchanges fell on Thursday. The lower consumption negates also supported the bearish sentiments. China retail sales fell 1.8% in June from the previous year period, marking the fifth consecutive month of declines. On the positive side, China’s GDP surged 3.2% in the June quarter compared to the consensus for 2.5%.
What does it mean?
- Asian stocks are largely down.
- European stock futures are moving between gains and losses.
- US futures are also in red.
- Investors are awaiting for ECB interest rate decision
- United Kingdom employment data and French CPI data is also due on Thursday.