European markets fell on Thursday, after another sharp sell-off on Wall Street and as France followed Britain in imposing tighter coronavirus restrictions.
It followed heavy losses in the US on Wednesday. Federal Reserve chair Jerome Powell said the central bank had done “basically all of the things that we can think of,” and was joined by other bank policymakers in calling for fiscal stimulus.
Investors’ pessimism about the chances of a political breakthrough on such stimulus saw a flight out of the three main stock indices in the US. The S&P 500 (^GSPC) lost 2.4% with almost every industry in the red, while the Dow (^DJI) lost 1.9% and tech-heavy Nasdaq (^IXIC) shed 3%.
“The Senate and House are clearly more focused on the election — and also now a supreme court seat — than getting an additional fiscal stimulus bill through in the short term,” wrote Deutsche Bank analysts in a note.
The declines in Europe also came as new curbs to tackle rising COVID-19 cases were announced in France. Restaurants and bars in major cities will have to shut at 10pm as in Britain, while attendance caps at major events and small gatherings have been lowered.
The country will be divided into zones according to alert levels, with authorities in the worst-hit areas able to declare a “state of health emergency” and take further measures.
Stocks also slid overnight in Asia. Japan’s Nikkei (^N225) lost 1.1%, Hong Kong’s Hang Seng (^HSI) fell1.8%, and China’s Shanghai Composite (000001.SS) was down 1.7%. The KOSPI (^KOSPI) in South Korea suffered steep declines, down 2.6%.