European Stocks Drop on Virus Wave Worries, Stimulus Plan Doubts
(Bloomberg) -- European stocks fell for a second day, with worries over a new wave of coronavirus infections lingering ahead of the earnings season, while doubts grew over the region’s ability to agree on a stimulus plan.
The Stoxx 600 Index was down 0.7% at the close, led by banks, autos and construction stocks. The gauge extended losses after Hungarian Prime Minister Viktor Orban poured cold water on the prospects of the European Union securing its spending program to boost the economy.
Among individual stocks, HSBC Holdings Plc fell 2.9% as the U.S. weighed a move to punish banks in Hong Kong. Nokia Oyj was down 8.1% following a JPMorgan Chase & Co. downgrade on worries over the telecom equipment maker potentially losing share with a key customer.
The FTSE 100 Index fell 0.6%, though U.K. homebuilders rose after the government announced a temporary cut to stamp duty as part of Britain’s own plan to kick-start the economy.
European stocks have rallied fairly steadily since hitting a March low. In addition, the second-quarter earnings season will provide further clues as to how the virus has impacted businesses and test whether the market’s momentum can be sustained.
“We’ve already seen a lot of the earnings growth forecast downgrades,” Seema Shah, chief strategist at Principal Global Investors, said in a phone interview. “Generally I think that’s all almost priced in for the market, so I don’t think there’s going to be any really major negative surprises out there which are going to stop markets in their tracks.”
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