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- European shares rose but caution prevailed after hitch in AstraZeneca’s COVID-19 vaccine trial.
- Bitcoin hits profit-taking after massive rally this week – a fall below $16,000 risks “FOMO destruction,” one analyst said.
- Oil eases below this week’s high as wariness over the demand outlook resurfaces.
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European shares traded cautiously higher on Friday, as news of a setback to a promising vaccine candidate dented some enthusiasm for equities and oil, while Bitcoin fell for a second day, as traders cashed in on this month’s scorching rally.
Hopes that a successful vaccine will soon start to be rolled out around the world have pushed global shares to record highs this month. Yet, Europe remains a hot-spot for the virus, despite a slowing in the daily increase in cases and hospitalization rates. Cases in Germany and Spain have passed the 1-million mark, most of the UK will be subject to harsh restrictions once a lockdown ends in England next week, while France has more than 2 million cases.
AstraZeneca, which on Monday said the vaccine it was developing jointly with the University of Oxford was 90% effective, has since thrown cold water on hopes for a prompt approval of the product. This is due to reports of an error during the trial.
However, a little more political uncertainty cleared on Wednesday after President Trump indicated he would leave the White House if the electoral college confirmed Joe Biden as the winner of the election earlier this month.
“The US stock market reopens today for a half day but volatility is likely to be quiet across the board – it is typically the case following Thanksgiving,” CMC markets analyst David Madden said.
“The excitement that we saw at the start of the week with respect to the progress made by AstraZeneca-Oxford University on their Covid-19 vaccine and the hopes that President Trump will leave office quietly in January will probably be the main points of the week,” he added.
US stock futures edged up, rising between 0.1 and 0.2%, indicating a steady start at the opening bell. US markets were closed on Thursday for the Thanksgiving holiday and will trade for reduced hours on Friday.
The Stoxx 600, which hit its highest since early March this week, was last trading almost unchanged on the day. The index has risen by nearly 15% this month, swept higher by optimism over the prospect of a vaccine.
Among the regional indices, Madrid’s IBEX 35 index rose 0.6%, lifted by gains in the shares of BBVA, the second-biggest bank, which rose by more than 2% after it walked away from a proposed merger with smaller rival Banco Sabadell that was agreed less than two weeks ago.
Shares in Sabadell fell by around 12%, making them the biggest losers in the European banking sector on Friday.
The FTSE 100 was one of the few laggards in Europe, falling 0.7%, while other blue-chip benchmarks rose modestly. Frankfurt’s DAX gained 0.2%, while Paris’ CAC 40 rose 0.4%.
Asian equity markets traded mostly higher overnight, after strong data on Chinese industrial profits boosted the Shanghai Composite by 1% and the Nikkei and the Hang Seng by 0.4% and 0.3%, respectively.
Oil edged down, losing around 2%, as the same concerns that limited gains across the equity market weighed on the energy sector. The crude price has been one of the biggest beneficiaries of the push into cyclical assets this month, with a gain of around 20%.
WTI crude futures fell 1.4% to around $45.08 a barrel, while Brent crude diverged, rising 0.2% to $47.98 a barrel.
Bitcoin fell for a second day, dropping 1.2% to around $16,097. The price roared to its highest since the record-highs of December 2017 earlier this week, gaining as much as $1,000 in a day at one point. Bitcoin is up around 27% so far this month, but this pales in comparison to the 113% gain in Ripple and even the 31% rally in Ethereum.
“The Bitcoin rally in November has been entirely driven by sentiment and not reality. And as with all get-rich-quick schemes, the losers are the ones long when the music stops, and the herd rushes for the exit door all at once,” Jeffrey Halley, a market strategist at broker OANDA, said.
“A fall through $16,000.00 should see more FOMO destruction,” he added.