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.
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.”
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.
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%.
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