European equities fell to their lowest in almost a month as jitters spread about next month’s US presidential election.
The regional benchmark Stoxx 600 share index dropped 0.7 per cent in early trading on Thursday, taking it back a level last seen in late September. Frankfurt’s Xetra Dax was down almost 1 per cent and London’s FTSE 100 slipped 0.4 per cent.
The sell-off came ahead of the final debate between President Trump and his Democratic challenger Joe Biden, who is leading the polls. Mr Trump suggested in their last debate that he may dispute the result of the election if he does not win.
Adding to the unease about political risk, the FBI said overnight that Russia and Iran had obtained voter information and may have used it to try and influence the outcome of the poll.
Market attention “has turned” to that announcement by national intelligence director John Ratcliffe, said Chris Scicluna, head of economic research at Daiwa.
Mr Ratcliffe’s allegations appeared to relate to a wave of emails to Democratic voters that purported to be from the Proud Boys, a far-right group that supports Mr Trump. Jim Reid of Deutsche Bank said the latest revelations “will only raise concerns that the [election] result will be disputed.”
European stocks were further pressured by a consumer survey that showed sentiment in Germany is worsening, with the GfK Institute’s sentiment index for the euro area’s biggest economy dropping to a reading of minus 3.1 points, from minus 1.7 points a month ago
The US dollar, as measured by an index that tracks its performance against six major currencies, was flat after weakening substantially on Wednesday because of hopes that Democratic and Republican lawmakers would agree a second major stimulus deal for the US economy.
But the progress of those talks was also thrown into doubt after markets closed in New York, by Mr Trump saying on Twitter that he did not “see any way” that Democrats would “do what is right for our great American workers, or our wonderful USA itself, on stimulus.”
He accused the Democratic Speaker of the House of Representatives Nancy Pelosi, and Senate Minority Leader Charles Schumer, of intending to bail out “poorly run” Democrat cities and states.
Futures markets indicated Wall Street shares would open lower later in the day. Contracts forecasting the direction of the S&P 500, and those on the top 100 stocks in the technology-focused Nasdaq, dropped 0.4 per cent.
