European stocks slide after Wall Street sell-off and new curbs in France

Tom Belger
·Finance and policy reporter
·2-min read
PARIS, FRANCE - SEPTEMBER 23: A waiter stands outside a busy terrace as Parisians relax as the French Government announced that from Monday all bars and cafes in Paris will be made to shut at 10pm as part of a string of new measures to curb the spread of Covid-19 in France on September 23, 2020 in Paris, France. With the rise in Coronavirus cases in France at 204 per 100,000 inhabitants, the French Government have followed other governments in introducing new restrictions aimed at reducing the spread of Covid-19 whilst avoiding another national lockdown. In large cities, including Paris, gatherings will be limited to ten people in public spaces, bars to close at 10 p.m., local and student parties will be prohibited. (Photo by Kiran Ridley/Getty Images)
A waiter stands outside a busy terrace as the French government announced that from Monday all bars and cafes in Paris will be made to shut at 10pm as part of a string of new measures to curb the spread of COVID-19. Photo: Kiran Ridley/Getty Images

European markets fell on Thursday, after another sharp sell-off on Wall Street and as France followed Britain in imposing tighter coronavirus restrictions.

Britain’s FTSE 100 (^FTSE) and France’s CAC 40 (^FCHI) both lost 1.2%, while the Europe-wide Stoxx 600 (^Stoxx) lost 1.1%, and Germany’s DAX (^GDAXI) dropped 1%.

It followed heavy losses in the US on Wednesday. Federal Reserve chair Jerome Powell said the central bank had done “basically all of the things that we can think of,” and was joined by other bank policymakers in calling for fiscal stimulus.

Investors’ pessimism about the chances of a political breakthrough on such stimulus saw a flight out of the three main stock indices in the US. The S&P 500 (^GSPC) lost 2.4% with almost every industry in the red, while the Dow (^DJI) lost 1.9% and tech-heavy Nasdaq (^IXIC) shed 3%.

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“The Senate and House are clearly more focused on the election — and also now a supreme court seat — than getting an additional fiscal stimulus bill through in the short term,” wrote Deutsche Bank analysts in a note.

US futures were pointing to further declines on Thursday. S&P 500 futures (ES=F) and Dow futures (YM=F) were 0.4% lower, and Nasdaq futures (NQ=F) were down 0.7% as European markets opened.

The declines in Europe also came as new curbs to tackle rising COVID-19 cases were announced in France. Restaurants and bars in major cities will have to shut at 10pm as in Britain, while attendance caps at major events and small gatherings have been lowered.

The country will be divided into zones according to alert levels, with authorities in the worst-hit areas able to declare a “state of health emergency” and take further measures.

Stocks also slid overnight in Asia. Japan’s Nikkei (^N225) lost 1.1%, Hong Kong’s Hang Seng (^HSI) fell1.8%, and China’s Shanghai Composite (000001.SS) was down 1.7%. The KOSPI (^KOSPI) in South Korea suffered steep declines, down 2.6%.