European stocks spent much of Wednesday in the red, after the European Union (EU) confirmed new export controls for COVID-19 vaccines manufactured in the bloc.
The EU said close to lunchtime it would introduce new rules ensuring "reciprocity and proportionality" are considered when authorising the export of any COVID-19 vaccines.
"The EU is proud to be the home of vaccine producers who not only deliver to EU citizens but export across the globe," European Commission president Ursula von der Leyen said in a statement. "But open roads should run in both directions. This is why the European Commission will introduce the principles of reciprocity and proportionality into the EU's existing authorisation mechanism."
Vaccines could be blocked if they are bound for countries that have vaccinated more of their populations than the EU or if the destination country has restrictions of its own on exports.
The New York Times reported overnight that the EU was was drawing up plans to block exports of COVID-19 vaccines for six weeks. The report said the move was likely to "disrupt supply to Britain."
While the EU did not announce any immediate restrictions, the new rules could see UK supply throttled. Vaccination rates are far higher than the EU's, meaning Britain is likely to fall foul of the proportionality test. The UK is the biggest destination for COVID vaccine exports from the EU, with around 10m shipped to date.
Export controls follow a row between the EU and AstraZeneca over fulfilment of Europe's vaccine order. The EU believes AstraZeneca (AZN.L) is unfairly rerouting jabs made within the bloc to Britain.
WATCH: European stocks down amid third wave fears
"While our member states are facing the third wave of the pandemic and not every company is delivering on its contract, the EU is the only major OECD producer that continues to export vaccines at large scale to dozens of countries," Von der Leyen said. "We have to ensure timely and sufficient vaccine deliveries to EU citizens. Every day counts.”
The row left European stocks on the backfoot for most of the session and the German DAX (^GDAXI) closed down 0.3% in Frankfurt.
"Continental European markets continue to struggle, but in the US the Dow and S&P 500 are moving higher in the wake of more strong PMI readings around the globe, and notably in the US," IG's Chris Beauchamp said.
READ MORE: UK inflation unexpectedly falls
New data published on Wednesday morning by IHS Market showed stronger-than-expected growth across the UK and eurozone.
"Impressive PMI numbers for March do little to boost sentiment given the expectation of downward revisions," said Joshua Mahony, a senior market analyst at IG.
In the UK, inflation data showed prices grew by 0.4% in February. The below forecast reading prompted early weakness for the pound (GBPUSD=X, GBPEUR=X).
GameStop (GME) fell 18% in New York, following a drop of more than 6% in the prior session.
"GameStop reported its earnings yesterday, and the stock missed both its profit and sales target, which resulted in the company's share price going lower in after-market hours yesterday," said Naeem Aslam, chief market analyst at Avatrade. "Today, we expect the stock to become highly volatile as the war may begin between bulls and bears."
Asian stocks sold-off sharply overnight. Japan's Nikkei (^N225) dropped 2%, the Hong Kong Hang Seng (^HSI) fell 2.2%, and the Shanghai Composite (000001.SS) closed down 1.3%. South Korea's KOSPI (^KS11) was a relatively strong performer, losing just 0.3%.
"The underperformance of the Hang Seng is due to a temporary pause in BioNTech/ Fosun Pharma vaccinations in Hong Kong as a result of a packaging defect," said Jim Reid, a senior strategist at Deutsche Bank. "Both the companies have played down concerns over safety due to this packaging issue."