LONDON – European stocks rose on Tuesday morning, in an attempt to recover from the brutal selling in the previous session, as investor sentiment was shaken by the new coronavirus strain in the United Kingdom.
Pan European Stokes 600 Trading was up 1.1%, with German stocks trading Dax The French CAC index both rose by 1.3%. Britain FTSE 100 Index Bucking the trend, dropping 0.2%. Banking stocks were the main gainers, up 2.2%, with Lloyds climbing more than 4% to lead the sector.
European markets came under heavy selling pressure on Monday amid concerns about the spread of the fast-spreading Covid boom that was first identified in Britain. The new alternative forced the UK government to close London and other parts of southeast England and back off mixing families during the Christmas holidays.
The variant, which scientists say is up to 70% more transmissible than previous strains in the UK, has also been identified in Italy, the Netherlands, Belgium, Denmark and Australia. It has caused multiple countries around the world to close their borders to Britain, disrupting travel and raising concerns about potential food shortages as the Brexit transition deadline approaches.
Meanwhile, the UK and the European Union remain deadlocked over post-Brexit trade relations with the December 31 deadline approaching, with disagreements over issues such as fisheries plaguing the talks. British Prime Minister Boris Johnson said on Monday that his country could still collapse without a deal.
“The situation has not changed and there are problems,” British Prime Minister Boris Johnson told reporters on Monday. “It is very important for everyone to realize that the UK must be able to fully control its own laws and that we also have to be able to control our own fisheries.”
“It remains the case that the terms of the WTO would be more than satisfactory for the UK and we can certainly overcome any difficulties that come our way.”
The British Pound extended losses on Tuesday, falling another 0.2% to around $ 1.34.
Official data showed that the UK’s gross domestic product grew by a record 16% in the third quarter, but that did not offset the 18.8% decline in the previous quarter when much of the economy was closed.
In Asia, stocks fell on concerns about the novel coronavirus strain. The MSCI’s broadest index of Asia Pacific stocks outside of Japan fell 0.43%.
On Wall Street, stock futures were mixed after a choppy session that saw the Dow Jones Industrial Average erase a 400-point deficit.
The silent move came as Congress, on Monday night, approved a government spending package to ease the Corona virus. The bill now goes to President Donald Trump’s office.
Looking at individual stocks, UK supermarket stocks came under pressure on Tuesday after it warned that disruptions from the international travel ban could lead to gaps on the shelves. Sainsbury’s shares are down 0.5% while European B&M is down 0.2%.