By Callum Keown
European stocks rounded off a blockbuster November with losses on Monday.
The pan-European Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.89% slipped 1%, while the German DAX /zigman2/quotes/210597999/delayed DX:DAX +1.34% was 0.3% down, and the French CAC /zigman2/quotes/210597958/delayed FR:PX1 +0.45% fell 1.4%. The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.76% fell 1.6%, despite more positive COVID-19 vaccine developments.
U.S. stocks fell in early trading , led by a 1.3% drop for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.66% , which remained set for its best monthly return since January 1987. The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.74% fell 0.9%, while the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.88% was 0.6% lower.
Some downward pressure on U.S. stocks came from a report that the administration of President Donald Trump could be ready to blacklist China’s biggest chip maker SMIC and energy giant CNOOC /zigman2/quotes/203421416/delayed HK:883 +0.93% . There are concerns of rising tensions with China just as President-elect Joe Biden takes office.
Investors will continue to watch a strong second wave of COVID-19 in the U.S. Dr. Deborah Birx, coordinator of the White House coronavirus task force, said she was “deeply worried,” about a post-Thanksgiving coronavirus surge, saying those who traveled for the holiday and gathered in big numbers should “assume” they are infected.
Despite the losses on Monday, the Stoxx 600 has climbed around 14% in November, as of Monday’s provisional close, and was set to record its largest monthly point gain since December 1986, according to Dow Jones Market Data, as COVID-19 vaccine developments and the prospect of lockdown easing have buoyed investors.
“After such impressive gains, and with the end of the year so close, it is hardly surprising that a significant amount of fund rebalancing and profit taking is felt across markets, putting some modest pressure on indices,” Chris Beauchamp, chief market analyst at IG, said.
“But this should be temporary, as further inflows and positive seasonality, plus the continued attempt to look beyond the virus to a time when vaccines are brought in, help to avoid any major declines,” he added.
The positive vaccine news kept coming over the weekend but failed to move stocks higher early on Monday. The U.K. regulator could approve the COVID-19 vaccine from drugmaker Pfizer /zigman2/quotes/202877789/composite PFE +1.00% and its partner BioNTech /zigman2/quotes/214419716/composite BNTX +9.35% within days, the Financial Times reported on Saturday, and the first immunizations from Dec. 7. The European Union’s European Medicines Agency is set to consider experimental vaccines from both Pfizer and biotech Moderna /zigman2/quotes/205619834/composite MRNA +1.65% next month, with inoculations beginning before the year-end.
Shares of AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN +0.72% rose 1.8%. Analysts at UBS lifted the biopharmaceutical company’s shares to neutral from sell.
Energy stocks fell, however, as oil prices /zigman2/quotes/211629951/delayed CL.1 -0.12% were under pressure ahead of the OPEC (Organization of the Petroleum Exporting Countries) meeting on Monday. Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA +0.60% /zigman2/quotes/205095589/composite RDS.A +1.89% tumbled 5.4% and BP /zigman2/quotes/202286639/delayed UK:BP -0.30% /zigman2/quotes/207305210/composite BP +0.87% was down 5.8%.
“An extension to production quotas is expected but the producers’ cartel has confounded expectations in the past,” said AJ Bell investment director Russ Mould, in a note to clients.