European stocks pulled back Tuesday 

European stocks pulled back Tuesday morning amid a choppy start to trading, as investors continued to monitor the rapid spread of coronavirus across the continent and digested a fresh round of major corporate earnings.

The pan-European Stoxx 600 slipped 0.4% below the flatline in early trade having initially edged into positive territory. Banks bucked the trend to jump 1.3% on the back of strong earnings while basic resources fell 1.4% to lead losses.

The European blue chip index plunged 1.8% on Monday as soaring global coronavirus cases, including in major European countries, and further delays to a potential U.S. stimulus bill hammered sentiment. The European tech sector plummeted 7.4% after Germany’s SAP abandoned its medium-term profitability targets and warned that its business would take longer than expected to recover from the pandemic.

Stocks in Asia-Pacific were lower overnight following Monday’s tumble on Wall Street, but Hong Kong-listed shares of HSBC gained substantially after the banking giant beat third-quarter profit expectations. U.S. stock futures pointed to a slightly higher open later on Tuesday.

Stateside, House Speaker Nancy Pelosi has reiterated hopes that a deal with Treasury Secretary Steven Mnuchin on a new coronavirus relief bill is still possible before next Tuesday’s presidential election, but key differences remain and slow progress has put markets on edge.

New record rises in daily Covid-19 cases have been seen in the U.S., Russia and France in recent days, while the U.K. is set to extend its highest category alert to more cities and German Chancellor Angela Merkel has warned colleagues that Germany is on the verge of losing control of the virus, according to The Guardian.

There has, however, been some promising news on the vaccine front. British pharmaceutical giant AstraZeneca on Monday said its potential Covid-19 vaccine has produced a similar immune response in older and younger adults.

The U.K. has warned that time is running out as the European Union’s top negotiator Michel Barnier travels to London to continue Brexit talks, with the two sides differing strongly on key issues in their bid to secure a new trading arrangement by year-end.

Earnings in focus

Santander on Tuesday projected an improvement of core profits for 2020 and reported a trebling of statutory net profit in the third quarter compared to a year ago. The Spanish lender’s share climbed 4.4% in early trade.

HSBC’s London-listed shares added 5.6% following its convincing third-quarter profit beat, while tobacco company Swedish Match jumped more than 6% after beating earnings expectations. Capgemini also rose by more than 6% after increasing its third-quarter revenue and projecting continual organic growth.

At the bottom of the Stoxx 600, Austrian retail bank Bawag and Finnish forestry firm UPM both fell more than 4% after downbeat earnings reports.

Source: CNBC

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