Global stocks wavered on Tuesday as governments imposed stricter social restrictions to stem the rise in coronavirus infections and key negotiations on both sides of the Atlantic remained unresolved.
Europe’s benchmark Stoxx 600 opened flat while London’s FTSE 100 lost 0.2 per cent and the price of oil edged down 0.2 per cent to just above $50 a barrel. Equities in the Asia-Pacific region were weaker across the board, despite upbeat retail sales and industrial production data from China that indicated the country’s continued recovery.
Traders were awaiting a possible outcome to fiscal stimulus talks among lawmakers in the US, and to Brexit talks between UK and EU negotiators across the Atlantic which have been repeatedly extended.
In the UK, heightened restrictions were announced on Monday for London among other areas as infections climbed, while New York mayor Bill de Blasio warned that the biggest US city faces a potential “full shutdown”.
UK health secretary Matt Hancock also said that a new variant of coronavirus had been identified in England.
Unemployment
Jim Reid, a strategist at Deutsche Bank, said a mutation to the virus was at the top of the risks of concerns for next year in an investor survey the lender recently ran.
Data released on Tuesday showed that the UK unemployment rate rose to 4.9 per cent in the three months to October, and that the country suffered the largest annual fall in employment for a decade. Still, some economists are growing more optimistic about next year.
"With the rollout of vaccines set to boost demand in 2021, we now think that the jobless rate will peak at 7 per cent rather than 9 per cent and be back at 4 per cent by 2023," noted Ruth Gregory, senior UK economist at Capital Economics.
Futures tipped Wall Street’s benchmark S&P 500 index to gain 0.5 per cent when markets open later. On Monday the index slipped for a fourth consecutive day as investors hoped policymakers would come to an agreement about the proposed stimulus package.
Copyright The Financial Times Limited 2020
