European markets head lower as UK ministers mull reopening delay
European stock markets fell into the red on Thursday after reports that UK ministers are considering delaying its final stage of reopening by two weeks if hospitalisations and deaths increase.
In London, the FTSE 100 (^FTSE) tumbled 1% by afternoon trade, while the French CAC (^FCHI) fell 0.4% and the DAX (^GDAXI) was 0.5% lower in Germany.
It came as the Financial Times said that a fallback plan was being discussed despite prime minister Boris Johnson remaining upbeat about easing restrictions in England on 21 June. One senior minister told the newspaper: “He’ll move heaven and earth for June 21.”
Although almost 40 million people in the UK have received a first dose of the coronavirus vaccine, and 26 million have received their second, according to government data, the country is still suffering with the spread of the Delta variant, which was first identified in India.
“I can see nothing in the data at the moment that means we can’t go ahead with step four, or the opening up on June 21, but we’ve got to be so cautious,” the PM said.
“What we need to work out is to what extent the vaccination programme has protected enough of us, particularly the elderly and vulnerable against a new surge, and there I’m afraid the data is still ambiguous.”
Meanwhile, London-based real estate agent Foxtons Group (FOXT.L) rose 1.4% as it revealed it expects first-half adjusted operating profit to exceed pre-pandemic levels.
It was boosted by a strong recovery in the UK housing market after an initial hit from the health crisis.
The company saw a 49% increase in first quarter sales revenues versus both 2020 and 2019, and the sales commission pipeline is now 65% ahead of where it was last year.
Across the pond, S&P 500 futures (ES=F) were down 0.6%, Dow futures (YM=F) were 0.5% lower, and Nasdaq futures (NQ=F) were 0.7% a few hours before the opening bell in New York.
Traders will be keeping an eye out for US payroll numbers later today, US economists are expecting a 750,000 increase in May.
This comes ahead of Friday's Non-Farm Payroll (NFP) jobs report for May - which may show a rebound in hiring after April’s slowdown. An increase to 435,000 after the previous week’s post-pandemic low of 406k is expected.
Richard Hunter, head of markets at Interactive Investor, said: “Markets are treading water ahead of more economic data points which will further inform the inflation debate.
“One of the drivers of market jitters around inflationary pressures has been bottlenecks in the labour market, and over the next two days the jobless claims number and the non-farm payrolls reading will provide new evidence on the state of the nation.”
Elsewhere, most Asian stocks climbed on Thursday, weathering the latest twist in US-China ties as well as Federal Reserve comments on a potential reduction in stimulus.
Bloomberg reported that president Joe Biden will amend a US ban on investments in companies linked to China’s military this week. Under the new amended order, the Treasury Department, instead of a congressionally-mandated Defense Department report, will create a list of companies that could face financial penalties for their connection to China’s defense and surveillance technology sectors.
Optimism over a vaccine rollout boosted Japanese equities, with the Nikkei (^N225) climbing 0.4%, while the Hang Seng (^HSI) fell 1.1% and the Shanghai Composite (000001.SS) dipped 0.3%.
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