European Stock Markets Climb despite Rout Elsewhere


Europe's main stock markets climbed Wednesday, brushing aside falls in Asia and an overnight rout on Wall Street.

In midday deals, London's benchmark FTSE 100 gained 0.8 percent, helped by the struggling pound which boosts    earnings for multinationals trading on the index.

Shares in British drugs group AstraZeneca dropped 1.5 percent after the company "voluntarily paused" a randomized clinical trial of its coronavirus vaccine, in what it called a routine action after a volunteer developed an unexplained illness.

The company, which is developing the drug alongside the University of Oxford, is a frontrunner in the global race for a Covid-19 vaccine. 

In eurozone stocks trading, Frankfurt's DAX 30 index won 0.9 percent and the Paris CAC 40 advanced 0.5 percent.

Sterling continuing its retreat on fears that Britain will fail to strike a post-Brexit trade deal with the European Union as the euro returned to a June high 91.09 pence. The pound also struck a six-week low at $1.2919.

Oil prices rebounded, meanwhile, from sharp losses.

"European stocks and US index futures have recovered... following a big drop on Wall Street the day before, where technology shares were hammered on valuation concerns," noted Fawad Razaqzada, analyst at ThinkMarkets. 

"There has been no obvious trigger behind the rebound and it remains to be seen whether the recovery will hold once the US session gets underway."

Razaqzada said that hopes of further stimulus from the European Central Bank could be helping eurozone indices. 

"Any hints of more stimulus from the ECB on Thursday would be seen as positive for European indices and potentially negative for the euro."

- Tech sell-off -

U.S. traders returned from a long weekend Tuesday to resume the selling that sent shudders through markets last week, as they fretted over the lofty valuations of many equities that have soared from their March troughs, helped by vast central bank support.

Last week's retreat was centered on tech giants including Apple, Microsoft and Tesla -- bringing the Nasdaq's succession of record highs to a juddering halt -- but analysts said the latest selling was broadening out.

Tuesday's blood-letting in New York once again saw Apple and Microsoft in the firing line, though the standout was Tesla, which collapsed 21 percent -- its worst day on record.

The Nasdaq, which had risen around 80 percent from its lows this year, is now officially in correction having lost more than 10 percent from its recent high on September 2.

And the red ink seeped into Asia on Wednesday, with Tokyo, Shanghai, Seoul, Mumbai, Manila and Wellington all down more than one percent, while Sydney and Jakarta shed more than two percent. 

Hong Kong, Singapore and Taipei were also in negative territory.

While technology firms in the region were taking a hiding, energy firms were also in the cross-hairs after oil prices on Tuesday suffered their heaviest losses since the early days of the pandemic.

The commodity had retreated on concerns about demand as the global recovery stutters and after the US summer holiday season -- when people traditionally take to the road -- came to an end.

There are fears OPEC will begin picking up production soon, after an output cut put in place to support the market earlier in the year.

- Key figures around 1145 GMT -

London - FTSE 100: UP 0.8 percent at 5,975.09 points  

Frankfurt - DAX 30: UP 0.9 percent at 13,085.47 

Paris - CAC 40: UP 0.5 percent at 4,997.53 

EURO STOXX 50: UP 0.8 percent at 3,292.86 (close)

Tokyo - Nikkei 225: DOWN 1.0 percent at 23,032.54 (close)

Hong Kong - Hang Seng: DOWN 0.6 percent at 24,468.93 (close)

Shanghai - Composite: DOWN 1.9 percent at 3,254.63 (close)

New York - Dow: DOWN 2.3 percent at 27,500.89 (close) 

Pound/dollar: DOWN at $1.2919 from $1.2981 at 2050 GMT

Euro/pound: UP at 91.09 pence from 90.70 pence

Euro/dollar: DOWN at $1.1763 from $1.1775

Dollar/yen: UP at 106.18 yen from 106.00 yen 

West Texas Intermediate: UP 1.4 percent at $37.28 per barrel

Brent North Sea crude: UP 0.8 percent at $40.08 per barrel