European Stocks Flat; Coronavirus Developments in Focus

European stock markets were largely flat Wednesday, with investors keeping a wary eye on developments surrounding the coronavirus while monitoring the U.S. political turbulence.

At 3:45 AM ET (0845 GMT), the DAX in Germany traded 0.1% lower, the CAC 40 in France rose 0.1% and the U.K.’s FTSE index climbed 0.1%.

The near-term outlook for the European economy darkened somewhat on Tuesday after a report by the newspaper Bild suggested German Chancellor Angela Merkel wanted to extend the current lockdown in Europe’s largest economy through the end of March.

“It seems the December trading enthusiasm, driven by the prospect of a global economic recovery, is now being offset by alarming Covid-19 numbers as well as valuation concerns over stocks that went far away from their equilibrium price,” said Pierre Veyret, a technical analyst with ActivTrades, in a morning note.

That said, the underlying tone remains positive given low interest rates globally and monetary and fiscal stimulus from central banks and governments alike, as well as the idea that vaccinations are coming.

Later Wednesday, the U.S. House of Representatives is set to vote to impeach President Donald Trump over the recent turmoil in the U.S. Capitol. Vice President Mike Pence resisted pressure on Tuesday to invoke the 25th Amendment to remove Trump. An impeachment trial could proceed even after Trump leaves office on Jan. 20.

Back in Europe, Telefonica (NYSE:TEF) stock rose 7.5% after the Spanish telecom company agreed to sell its mobile phone masts in Europe and Latin America to U.S.-based telecom infrastructure operator American Towers for 7.7 billion euros ($9.41 billion) in cash.