MILAN/FRANKFURT: European stocks slid on Thursday, with UK markets leading the way after Britain's government launched a scaled-back job support programme, while a second wave of Covid-19 cases across the continent dampened investor sentiment.

The pan-European STOXX 600 index fell 1.0% to close at its lowest level since Aug 3, with the retail, oil & gas and financial services sectors falling the most. M&A speculation drove a 1.3% rise in Italian banking stocks, while the European banking index slipped 0.4%.

Italy's third-largest bank Banco BPM jumped 5.8% and Credito Valtellinese surged 11.6%, with traders citing a Bloomberg report that suggested talks of possible takeover interest from French bank Credit Agricole. Earlier, a Banco BPM spokeswoman said it was not in contact with bigger rival UniCredit over a potential merger, dismissing a press report. UniCredit rose 2.3%.

The STOXX 600 had cut losses earlier in the session after surveys showed business morale in Germany and France improved for the fifth month in a row in September, suggesting that both countries are set for strong growth in the third quarter. The relief, however, proved temporary, with US markets hesitating to rise after a surprise rise in weekly jobless claims.

The German DAX was down 0.3%, outperforming the regional indexes, while France's CAC 40 fell 0.8%. UK's FTSE 100 lagged with a 1.3% drop, failing to draw cheer from a new job support plan. Under the "more targeted" programme, Finance minister Rishi Sunak said government support would only be available to workers whose employers keep them on at least a third of their normal hours.

Comments

Comments are closed.