European Stocks Higher; Investors Look to The ECB By

© Reuters.

By Peter Nurse – European stock markets traded higher Wednesday, with investors taking a potential delay to a Covid vaccine and heavy selling of U.S. tech stocks in their stride ahead of Thursday’s ECB meeting.

At 4:05 AM ET (0805 GMT), the in Germany traded 1.1% higher, the in France rose 0.9% and the U.K.’s index was up 1.2%.

AstraZeneca (NYSE:) announced late Tuesday it had paused a late-stage trial of one of the leading Covid-19 vaccine candidates due to an unexplained illness in a study participant.

However, AstraZeneca stock only dropped 0.4% in European trading, with investors seemingly satisfied with the pharma giant’s explanation that the pause was “a routine action which has to happen whenever there is a potentially unexplained illness in one of the trials.”

This comes as coronavirus cases have started growing again in a number of European countries, prompting a number of travel restrictions, while the U.K. tightened rules surrounding social gatherings, limiting groups to a maximum of six people. 

This all puts the focus squarely on the European Central Bank, which meets on Thursday, as increased restrictions, a firmer euro and signs that the economic recovery is slowing boost the case for more monetary stimulus. 

The sell-off in big tech stocks continued Tuesday, resulting in large losses overnight on Wall Street. The fell 2.3%, or 632 points. The was down 2.8%, while the slumped 4.1% into correction territory, with losses of about 10% in the past three days.

In corporate news, Tullow Oil (LON:) slumped 11% after posting a $1.3 billion loss in the first half of the year and writing off $1.4 billion due to a lowering of its price outlook.

Staying with oil, crude prices bounced Wednesday, recovering some of the previous session’s sharp selloff which saw the international benchmark contract trade below $40 a barrel for the first time since late June.

The oil market will have a lot to digest during the session, with the OPEC monthly report and the Energy Information Administration’s Short-Term Energy Outlook due for release later Wednesday. 

Additionally, the weekly API report, due a day later than usual due to Monday’s holiday, is likely to show another draw in crude stockpiles for the week ended Sept. 6.

futures traded 2.1% higher at $37.52 a barrel, while the international benchmark Brent contract rose 1.5% to $40.38.

Elsewhere, fell 0.2% to $1,939.60/oz, while traded largely flat at 1.1778.

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