European Stocks Largely Flat; New German Restrictions Eyed

European stock markets stagnated Thursday, settling into narrow ranges in anticipation of the U.S. Thanksgiving holiday after a volatile few days.

At 3:55 AM ET (0855 GMT), the DAX in Germany traded flat, the CAC 40 in France was up less than 0.1%, while the U.K.’s FTSE index dropped 0.3%, still pressured by Wednesday’s dramatic public spending statement by the U.K. government.

U.K. Finance Minister Rishi Sunak warned on Wednesday that the British economy was on course to shrink by 11% this year, while unveiling plans to borrow around 400 billion pounds this year, amounts not seen before in Britain’s peacetime.

There was a muted reaction to news out of Germany late on Wednesday that shied away from tightening restrictions on businesses but which ensured that the country’s hospitality industry will remain effectively closed over the holiday period. Chancellor Angela Merkel’s chief of staff Helge Braun said on Thursday some restrictions may have to stay in place until March.

Earlier Thursday the Robert Koch Institute announced over 32,000 new cases of the coronavirus in Germany, and a third straight day of over 300 deaths.

The slowdown in the German economy was evident earlier in the monthly GfK German Consumer Climate index survey, where the main index fell by more than expected to -6.7 in December, from a revised -3.2 in November.

The European Central Bank is scheduled to release the minutes of its last policy meeting later in the session.

In corporate news, STMicroelectronics (PA:STM) stock rose 2.7% and Infineon (OTC:IFNNY) stock climbed 0.6%, both to all-time highs, with chipmaker stocks remaining in demand with the work-for-home trend still firmly in vogue.

Elsewhere, Europcar (PA:EUCAR) stock climbed 3.8%, with the car rental company appearing to have avoided bankruptcy. Remy Cointreau (PA:RCOP) stock fell 1.4% after the French drinks company reported first-half results and consumer goods group Unilever (NYSE:UL) stock rose 1.7% on agreeing to buy U.S.-based vitamin company SmartyPants Vitamins.

Oil prices eased Thursday, after gains overnight on the back of a surprise fall in U.S. crude inventories. The market has risen around 9% this week as traders hope for a prompt rebound in demand next year as vaccines bring the pandemic under control.

The U.S. Energy Information Administration recorded a draw of 754,000 barrels for the week to Nov. 20, compared with forecasts for a 614,000-barrel rise, a report released Wednesday showed.

U.S. crude futures traded 1.5% lower at $45.02 a barrel, while the international benchmark Brent contract fell 1.5% to $47.80.

Elsewhere, gold futures rose 0.5% to $1,813.80/oz, while EUR/USD traded 0.1% higher at 1.1923.