European equities slid on Friday as investors were pricing in tightening of pandemic restrictions due to worsening of near-term outlook on pandemic spread. On the contrary, announcement of additional U.S. stimulus measures limited downside impact of the Covid-related news on equity markets’ mood.
The coronavirus continues to hit the European economy hard. The UK reported Friday morning that its GDP fell 2.6% in November, returning 8.5% below its February 2020 level, with the services sector being the main brake on growth.
France on Thursday announced it would postpone its night curfew two hours earlier by at least two weeks, while the German government mulls tighter restrictions as countries across the continent try to slow the spread of the virus.
Italy, the eurozone's third-largest economy, is suffering not only from renewed coronavirus outbreak, but also from a deepening political crisis after former Prime Minister Matteo Renzi pulled his Italia Viva party out of the ruling coalition, stripping it of most parliamentary seats.
Oil prices eased on Friday amid fears of a resurgence of COVID-19 cases in China, the world's largest importer of crude oil, with the country on Friday reporting the highest number of daily infections in more than 10 months, triggering quarantine restrictions for more than 28 million people, which could potentially reduce energy demand.
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