ASX set to slide lower as European markets dip

European stockmarkets were subdued on Thursday after significant gains in recent days and as US trading remained closed for the Thanksgiving holiday.

Investors have been in an upbeat mood this week, pushing the Dow above 30,000 for the first time, on news of the development of coronavirus vaccines and treatments.

The FTSE in London slid on Thursday.
The FTSE in London slid on Thursday. Credit:Bloomberg

They then became more cautious as coronavirus infection rates remain high in many major economies and after the release of a batch of discouraging US economic data, including jobless numbers.

Germany’s DAX ended the day flat at 13,286 while France’s CAC 40 dipped about 0.1 per cent to 5,566. Britain’s FTSE 100 slipped 0.6 per cent to 6,362. The Australian sharemarket is set to open lower, with futures at 5.02am AEDT pointing to a fall of 16 points or 0.2 per cent.


US markets will be closed Thursday and open for half the day on Friday.

Cases of COVID-19 continue to soar around the world, and deaths related to the sickness are growing, hitting more than 1.4 million people cumulatively worldwide. Worries are growing about it spreading during the Thanksgiving holiday in the US.

In Japan, authorities asked restaurants and bars to close early, and people to refrain from travel. European governments are looking to ease existing restrictions ahead of Christmas, though many limits on business are expected to continue.

Economic data has been mixed this week, with reports showing the number of Americans seeking unemployment aid jumped last week to the highest level in more than a month. A separate report showed consumer spending posted the weakest gain since April.

“The market overall has reached by most standards what we call overbought conditions, and that typically suggests that the market would need to digest the gains, perhaps pause a bit, and consolidate,” said Quincy Krosby, chief market strategist at Prudential Financial.

The Commerce Department said US consumer spending, the primary driver of the economy, rose by a sluggish 0.5 per cent in October, the weakest gain since April when the pandemic first erupted. At the same time, the government said that income, which provides the fuel for consumer spending, fell 0.7 per cent in October.

In energy trading, benchmark US crude shed 56 cents to $US45.15 a barrel. Brent crude, the international standard, fell 61 cents to $US47.92 a barrel.

The dollar inched down to 104.25 yen from 104.50 yen. The euro cost $US1.1906, up from $1.1885.


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