European stocks on Friday closed slightly lower, taking the shine off a 7 percent rally this week as investors focused on soaring COVID-19 cases on the continent and uncertainty around the US presidential election.
The pan-European STOXX 600 slipped 0.2 percent to 366.4 after a five-day winning streak that saw it gain 7.02 percent and marked its best week since early June.
Sparking a rally in global stocks, investors bet that former US vice president Joe Biden would become the next US president, but Republicans would retain control of the US Senate, potentially delaying major policy changes including tighter scrutiny on big US companies.
However, Wall Street stocks were choppy on Friday as Biden took the lead over US President Donald Trump in the battleground states of Pennsylvania and Georgia, putting him on the verge of winning the White House.
“Nagging doubts remain that the eventual outcome may well end up in the US courts,” Michael Hewson, chief market analyst at CMC Markets wrote in a note. “For now, financial markets don’t appear too concerned, however it would still seem prudent to take some money off the table as we head into the weekend.”
Meanwhile, Italy registered its highest ever daily COVID-19 case tally, with the Lombardy region remaining the hardest hit area.
Airline Deutsche Lufthansa AG dropped 6.9 percent as Germany warned against unnecessary travel to Denmark, Italy and several other countries.
“Almost certainly, we could see double-dip recession in parts of Europe,” said Dhaval Joshi, European investment strategist at BCA Research in London.
Automakers fell the most, down 1.7 percent after surging this week on hopes that a Biden win could lead to a softer stance on trade policies.
In London, the FTSE 100 inched up.
After trading as much as 0.8 percent in either direction, the blue-chip FTSE 100 index closed 0.07 percent higher at 5,910.02, helped by mining and food and drug retailer stocks, but with a stronger pound weighing.
Increasing 5.97 percent from a week earlier, the index logged its best weekly gain since early June as the British government and the Bank of England ramped up stimulus measures to support an economy facing the impact of a second nationwide lockdown.
New COVID-19 infections in England have stabilized at about 50,000 a day, according to a British Office for National Statistics survey, but the reproduction “R” number was unchanged at 1.1 to 1.3, suggesting the epidemic has continued to grow in the past few weeks.
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