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European shares slip ahead of Trump-Biden debate

By: Reuters Editorial | 29 September 2020

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(Reuters) – European stock markets slipped on Tuesday as a rebound in the previous session fizzled out, with investors remaining cautious ahead of the first U.S. presidential debate.

The pan-European STOXX 600 <.STOXX> was down 0.5% after recording its biggest single-day gain in three months on Monday.

Banks <.SX7P> handed back some of the previous session’s 5.6% gain, while insurers <.SXIP> and automakers <.SXAP> fell nearly 1% as the global death toll from the COVID-19 pandemic crossed 1 million, according to a Reuters tally.

While there were some signs of progress in talks over a fresh U.S. coronavirus relief bill, investors were mostly in a wait-and-see mode as U.S. Democratic presidential nominee Joe Biden and President Donald Trump looked set to square off in their first debate in Cleveland, five weeks before the election.

“Even a half decent performance from Joe Biden could well trigger some anxiety in U.S. equity markets given that the Democrats have a much more interventionist stance towards business and the economy,” Michael Hewson, chief market analyst at CMC Markets wrote in a note.

“This may help explain the more cautious tone for markets in Europe today, particularly as we are coming to the end of the month, as well as the quarter.”

While Monday’s bounce back helped the STOXX 600 turn positive for the third quarter, the benchmark was on course to end September with a more than 1% drop, its biggest since the peak market selloff in March, amid concerns of a second wave of COVID-19 infections, Brexit developments and the upcoming U.S. election.

Among individual movers, Air France KLM <AIRF.PA> fell 4.0% after HSBC downgraded the stock to “reduce” from “hold”.

British plumbing parts distributor Ferguson <FERG.L> jumped 4.8% as it restored its dividend after a series of cost-reduction measures and resilience in its main U.S. business helped it report a 4.1% rise in annual profit.

British baker Greggs <GRG.L> slipped 3% as it cautioned that the outlook was uncertain because of the pandemic and it would have to cut staff jobs and hours.

 

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)


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