European stock markets fall mid-trading day due to uncertainty

January 07, 2021 14:30

The main European indices began today's trading day on a high for the second day in a row, in anticipation of a new stimulus package in the US and the approval of a second vaccine against the Covid-19 from Moderna. However, in the middle of the trading day, the stock markets suddenly fell, and in the case of London, Milan, and Rome, they were trading in the red. Only the German DAX and the French CAC 40 were green by 1pm, albeit with very timid rises.

Source: Admiral Markets MetaTrader 5. DAX 30 weekly chart. Data range: November 29, 2009 to January 7, 2021. Prepared on January 7, 2021 at 1:30 p.m. CET. Keep in mind that past returns do not guarantee future returns.

 

Despite the pandemic, the DAX 30 closed 2020 with a rise of around 3.6%, leading the main German index to hit all-time highs. Other indices such as the Euro Stoxx, the CAC 40 or the FTSE 100, however, closed with losses of between 5% and 14%. 

The new mobility restrictions adopted in England and Scotland and that could be extended to other countries to curb an uncontrolled pandemic continue to generate uncertainty, although economic confidence in the euro area rose in December to 90.4 points from 87.7 the previous month, according to data from the European Commission. 

The economic data, however, remains unfavourable. The inflation rate in the euro area remains in negative territory for the fifth consecutive month, as it ended December at -0.3%, according to Eurostat, the European statistical office. 

To alleviate the effects of the crisis, the European Central Bank (ECB) has increased the purchases of debt in the eurozone and will extend the acquisitions until March 2022.

In 2016 the DAX rose by 6.87%, in 2017 by 12.51%, in 2018 it lost by 18.26% in 2019 it rose by 25.48 % and in 2020 it rose 3.6%.


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