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 per cent, helped by the struggling pound which boosts earnings for multinationals trading on the index.

Shares in British drugs group AstraZeneca dropped 1.5 per cent after the company "voluntarily paused" a randomised 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 per cent and the Paris CAC 40 advanced 0.5 per cent.

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." 

READ MORE 

Gold dips on dollar strength, cenbank meetings in focus

Oil extends decline as demand worries mount

Pound hits 6-week low on Brexit fears, implied volatility curve inverts for first time in 6 months

Tech sell-off

US 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 centred 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 per cent -- its worst day on record.

The Nasdaq, which had risen around 80 per cent from its lows this year, is now officially in correction having lost more than 10 per cent 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 per cent, while Sydney and Jakarta shed more than two per cent.

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.

Agence France-Presse