Blog: European stocks rebound after sell-off – Yahoo Finance UK

European stock markets rallied on Friday, as investors went bargain hunting following Thursday’s sell-off.

Equity markets across Europe had tanked on Thursday, as countries ramped up restrictions to tackle the rising COVID-19 second wave.

Major markets rebounded strongly in early trade on Friday. The FTSE 100 (^FTSE) opened up 1%, the CAC 40 (^FCHI) gained 1.3%, and the DAX (^GDAXI) rose 0.6%.

However, all three were still trading below levels seen on Wednesday evening prior to yesterday’s sell-off.

Analysts said investors were still cautious as a result of uncertainty around Brexit and US stimulus. Rising COVID-19 cases and increased restrictions around the world were another factor weighing on sentiment.

“There is no scarcity of bad news in the market,” said Naeem Aslam, chief market analyst at Avatrade.

“It doesn’t matter if one is looking at the potential coronavirus vaccine’s performance or the current earnings season. It is pretty much a dark mood everywhere among investors.”

READ MORE: One in four UK firms stockpiling for Brexit disruption

Emmanuel Cau, Barclays’ head of European equity strategy, said: “While we await results of the US elections, progress on vaccines and a Brexit outcome, the next few weeks may feel like being inside the twilight zone.”

UK prime minister Boris Johnson is due to make a statement on the future path of Brexit negotiations on Friday. Johnson had set a deadline of 15 October — yesterday — to reach a deal. The pound was unchanged against the dollar (GBPUSD=X) and euro (GBPEUR=X) in early trade.

Wall Street futures were treading water. S&P 500 futures (ES=F), Dow Jones futures (YM=F), and Nasdaq futures (NQ=F) were all flat.

Action was mixed in Asia overnight. Japan’s Nikkei (^N225) fell 0.4%, the Hong Kong Hang Seng (^HSI) rallied 1%, the Shanghai Composite (000001.SS) was flat, and the Shenzen Component (399001.SZ) fell 0.7%.

Watch: Why tax rises may be inevitable in Britain

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