(Bloomberg) -- European stocks gave up gains they had held for most of the session in the final hour of trading, as a resurgence in coronavirus cases in the U.S. halted progress on reopening parts of the economy.
The Stoxx Europe 600 Index dropped 0.4% at the close, tracking U.S. equities lower as the Texas governor took measures such as ordering taverns to close, while Florida reported a record number of new cases. Banks and telecoms tumbled, while tech and real estate shares outperformed.
Investor sentiment continues to balance economic stimulus measures against the rising levels of fresh coronavirus cases, as the U.S. recorded its biggest-ever jump in infections. Although the Stoxx 600 is on track to post a third monthly gain, the pace of the rise has been dented by its 2% drop this week.
“The dangers remain the months of August and September, as from a seasonal perspective, these tend to be the worst months of the year for equities,” said Edmund Shing, head of equity derivatives strategy at BNP Paribas SA.
Among notable movers, Wirecard's free fall continued with a 64% drop. Investors are also awaiting the second-quarter results season for further direction and clues on the financial impact of the virus.
“Equity markets remain supported both by the political and liquidity cycle, pushing also the economic and therefore earnings cycle ahead,” said Robert Greil, chief strategist at Merck Finck. “Stock markets, while remaining volatile, look well supported from here.”
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