Europe Markets

European stocks close lower as coronavirus, Brexit concerns offset U.S. stimulus hopes

Key Points
  • The pan-European Stoxx 600 closed down by almost 0.2%, having been up by as much as 0.8% earlier in the session.
  • House Speaker Nancy Pelosi said she was optimistic about pushing through a stimulus bill before the Nov. 3 election.
  • However, concerns about the coronavirus spread and state of Brexit trade talks continue to keep a lid on gains.

LONDON — European stocks erased gains on Monday to close lower as lingering coronavirus concerns offset resurfaced hopes of a U.S. stimulus deal in the coming weeks.

The pan-European Stoxx 600 closed down by almost 0.2% provisionally, having been up by as much as 0.8% earlier in the session. The chemicals sector dipped 0.9% to lead the losses while financial services shares gained 1%.

Global markets were bolstered at the start of trading after U.S. House Speaker Nancy Pelosi said Sunday that although differences remain between congressional Democrats and White House negotiators, she was optimistic about pushing through legislation on a fiscal stimulus deal before the Nov. 3 election.

However, concerns about the coronavirus spread and state of Brexit trade talks continue to keep a lid on gains. A second wave of coronavirus cases in Europe remains a key focus for markets in the region, as well as Brexit after discussions between the EU and U.K. appeared to reach a stalemate.

Prime Minister Boris Johnson said last week that talks were "over" and the U.K. should "get ready" to trade with the EU from Jan. 1 without a deal in place. In signs there could be some room to maneuver still, trade talks will continue on Monday but not in person, as previously planned.

In coronavirus news, Italy's prime minister announced more measures to curb a second wave of infections Sunday, including restricted opening times for restaurants and limits on public gatherings. The move comes after more than 11,000 new cases were reported on Sunday.

On Wall Street, stocks slipped as investors hoped for a stimulus deal from Washington, however the rising number of Covid-19 cases dampened sentiment.

China's third-quarter GDP grew 4.9% as compared to a year ago, according to data released Monday by the country's National Bureau of Statistics. That compared against expectations by Chinese economists of 5.2% GDP growth in the third quarter.

Stocks on the move

In terms of individual share price action, IWG climbed almost 5% after Berenberg upgraded the office space provider's stock to "buy" and raised its price target. Swiss wealth manager Julius Baer gained 6% following an upbeat third-quarter earnings report.

At the bottom of the European blue chip index, Saab shares dropped more than 14% after the Swedish aerospace company posted a disappointing set of third-quarter results.