Europe Markets

European markets close little changed as rally stalls

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Key Points
  • Positive coronavirus vaccine news and emerging political certainty in the U.S. have prompted global stock markets to rally, but the momentum petered out in the early hours of the European trading session.

LONDON — European stocks closed little changed on Wednesday, pausing for breath after rallying on growing political certainty in the U.S. and positive coronavirus vaccine news.

The pan-European Stoxx 600 index provisionally finished the session 0.06% below the flatline. Oil and gas stocks slid 1.26% to lead losses while telecoms gained 1.08%.

Positive coronavirus vaccine news and emerging political certainty in the U.S. had prompted global stock markets to rally in recent days, but the momentum petered out in the early hours of the European trading session.

Stocks in Asia-Pacific were mixed in Wednesday trade following a record session on Wall Street Tuesday. U.S. stock markets fell on Wednesday, however, with the Dow Jones Industrial Average slipping more than 150 points by the European close, having broken above 30,000 for the first time on Tuesday.

The U.K. announced Wednesday its largest peacetime borrowing level ever as the coronavirus pandemic is forecast to cause the largest plunge in economic output for 300 years. The British economy is forecast to contract by 11.3% in 2020, according to the Office for Budget Responsibility (OBR), with the government on course to borrow £394 billion ($526 billion), or 19% of GDP (gross domestic product).

Britain's FTSE 100 was the biggest loser among Europe's major indexes Wednesday, closing 0.7% lower.

The European Central Bank (ECB) on Wednesday warned that European banks will not see profits return to pre-pandemic levels before 2022.

The recent rally up until Wednesday had been catalyzed by British pharmaceutical giant AstraZeneca announcing that an early analysis showed its vaccine candidate had an average efficacy of 70%, adding to positive vaccine news from Pfizer and Moderna.

Outgoing President Donald Trump briefly emerged for a press conference on Tuesday to tout the Dow's breaking 30,000 for the first time ever, but left after a minute without taking questions. Meanwhile President-elect Joe Biden introduced his nominees for top national security positions, saying they will "restore America globally, its global leadership and its moral leadership."

In terms of individual share price movement Wednesday, technological payments provider Network International slid 7.3% to the bottom of the Stoxx 600, while British farming biotech firm Genus climbed 6.8% after a positive trading update.

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- CNBC's Fred Imbert and Kevin Breuninger contributed to this report.