By Huw Jones
LONDON, Oct 15 (Reuters) – European stocks hit a two-week low on Thursday, hit by tighter restrictions in London and Paris to face a second wave of COVID-19 infections and a lack of progress in negotiations. on post-Brexit trade.
* Wall Street would also start the session at a loss, as the authorities in the United States have failed to agree on an economic stimulus package before the presidential election next month.
* Analysts said, however, that the markets’ biggest drop in three weeks was more of a pause than a fundamental change.
* “We must be careful not to read too much about these moves before the next US elections,” said Ned Rumpeltin, European director of foreign exchange strategy at TD Securities. “There’s kind of a general sense of risk aversion to the day. Really, I don’t see today as a change in trends and general direction.”
* Europe’s leading stock indices fell 2% or more, following weak Asian markets and after Wall Street closed lower on Tuesday after the start of the earnings season.
* Analysts said confidence was hit by rising coronavirus infections in Europe and the absence of signs of a vaccine in the short term after trials of two high-profile candidates ran into trouble.
* Hopes for a stimulus package in the United States before next month’s presidential elections have also faded, after Treasury Secretary Steven Mnuchin said such a deal would be difficult.
* The pan-European STOXX 600 index fell 2.1% to near a two-week low, while markets in London and Paris were down between 2% and 2.2% and those in Frankfurt and Milan lost between 2, 6% and 2.7%.
* A two-day summit of European Union leaders begins on Thursday, as the EU and the United Kingdom continue to negotiate to overcome obstacles, such as fishing rights and competition guarantees, to reach a trade agreement before December 31.
* The British pound fell 0.4% to $ 1.2950, while the euro lost 0.25% to $ 1.1716, its lowest level in a week.
* In Asia, the MSCI Asia Pacific Equity Index excluding Japan fell 1.3%, weighed down by declines of more than 2% in Hong Kong and India. Japan’s Nikkei index lost 0.5%.
* Brent crude oil futures were down 2.3% at $ 42.31 a barrel, while US West Texas Intermediate (WTI) oil futures fell to $ 39.97. Gold and industrial metals such as copper were stable.
(Additional reporting by Suzanne Barlyn in New York; Edited in Spanish by Ricardo Figueroa)