European Shares Fall on Virus And Policy Concerns

European shares rebounded after data showed German consumer morale deteriorating with the rise in Covid-19 cases, while the atmosphere was also negatively affected by concern about the prospects for monetary policy.

The pan-European Stoxx 600 index fell 0.6%, with retail and mining stocks among the biggest losers.

Investors remain anxious ahead of the Federal Reserve’s annual symposium scheduled for Friday when Fed Chairman Jerome Powell’s speech is likely to provide hints about plans to scale back his stimulus program.

Earlier, the South Korean central bank raised the base interest rate from a record low, the first major economy in Asia to do so.

A survey revealed that German consumer sentiment deteriorated towards September as accelerating inflation and a rise in COVID-19 infections caused them to be more reluctant to buy.

Germany’s leading index, the DAX, fell 0.8% to its lowest level in nearly a week, while Britain’s FTSE 100 and France’s CAC 40 fell 0.6%each.