European stocks lose steam after five-day rally

European stocks drifted lower on Friday after a strong rally this week as Italy and France posted a record number of coronavirus cases, while investors assessed the implications of a political gridlock in Washington on policy and stimulus.

The pan-European STOXX 60 index was down 0.8% after a five-day winning run that put the index on course for its best week since early June. France, already under a national lockdown, set a daily record for COVID-19 cases for the second time in four days, and Italy also registered its highest ever daily tally on Thursday.

Travel & leisure stocks fell the most in response, with British airline easyJet saying the recently announced lockdowns in England, Germany and France had forced it to scale back its already reduced flying schedule. Its shares declined 3.1%.

Technology and healthcare heavyweights also fell after strong gains this week. Global stock markets rallied earlier this week as investors took the view that a divided U.S. Congress could delay major policy changes including tighter scrutiny on big American firms.

Democrat Joe Biden was moving closer to victory over Republican President Donald Trump in the race for White House, but the outcome was unclear with votes still being tallied and Trump falsely claiming the election was being “stolen” from him.

European stocks lose steam after five-day rally, Reuters, Nov 6