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European Stocks Sharply Lower; Covid Fears Overshadow Healthy PMIs -Breaking

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© Reuters.

Peter Nurse 

Investing.com. European stock markets were sharply down Tuesday due to the recent surge in Covid-19 cases across the continent, which weighed on sentiment as more lockdowns are looming.  

At 3:45 AM ET (0845 GMT), the in Germany traded 1.3% lower, the in France also fell 1.3% and the U.K.’s dropped 0.6%.

On Monday, Austria reinstated a national lockdown to counter a surge in Covid-19 case filings. Investors worry that Germany, which is the major growth driver for the Eurozone’s Eurozone, may soon follow their lead. 

German Chancellor Angela Merkel described the current situation as worse than any she has ever experienced in her country, and Jens Spahn, Health Minister of Germany, gave a harsh assessment about the state of affairs.

“Some would say this is cynical but probably by the end of this winter, pretty much everyone in Germany will be vaccinated, recovered or dead … That’s the reality,” Spahn told a press conference in Berlin on Monday.

This fear has overshadowed the stronger than anticipated flash PMI data from France and Germany, which suggests that businesses continue to perform in spite of recent Covid cases.

PMI for the key, which is a major growth driver in the region, was released at 57.6, slightly lower than the 57.8 reading the month before. 

E.ON stock dropped 3.5% on Tuesday after Europe’s largest operator in energy networks stated that it planned to invest around 27 billion euros (or $30 billion) into its core business and prepare for a greener future.

Compass stock (LON:) dropped 1.9% despite the company resuming dividend payments, after it reported a higher-than-expected annual profit and economies being reopened.

Market participants will also be digesting President Joe Biden’s decision to appoint Jerome Powell again as Chairman of Federal Reserve. Now, this nomination is headed to the Senate for confirmation. The tech-rich and Treasury markets closed sharply lower, as investors bet that Powell will be more aggressive in fighting inflation than Lael brainard, his possible replacement.

The U.S. is expected to soon release oil from strategic reserves, a growing indication that crude prices will fall on Tuesday.

According to Reuters, the United States will announce a loan of crude oils from its emergency stockpile Tuesday. This was reported by Reuters, citing a source close to the matter.

The likes of India, Japan, South Korea and China, the world’s biggest oil importer, are also expected to join in the release of additional output.

Futures were trading 1.2% lower at $75.84 per barrel by 3:45 ET while contract prices fell 0.8% at $79.05. 

Also, it fell 0.1% to $1.804.10/oz. However, it traded 0.2% lower at 1.1254.

 

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