European stocks fall ahead of Biden infrastructure speech

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
US president Joe Biden prepares to sign the Paycheck Protection Program (PPP) Extension Act of 2021 into law at the White House in Washington, DC, on 30 March. Photo: Jim Watson/AFP via Getty Images
US president Joe Biden prepares to sign the Paycheck Protection Program (PPP) Extension Act of 2021 into law at the White House in Washington, DC, on 30 March. Photo: Jim Watson/AFP via Getty Images

European stocks fell on Wednesday, as investors awaited details of a $4tn (£3tn) infrastructure spending plan in the US.

The FTSE 100 (^FTSE) closed down 0.8% in London and the CAC 40 (^FCHI) lost a third of a percent in Paris. The DAX (^GDAXI) was flat in Frankfurt. The Euronext 100 (^N100), which tracks the share prices of Europe's 100 biggest firms, fell 0.3%.

In London, food delivery startup Deliveroo closed down 26% as investors shunned the company's initial public offering. It marked on of the worst stock market debuts in at least a decade.

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Attention across the markets was focused on a major speech by US President Joe Biden on infrastructure spending coming up later today.

"We’re yet to get the full details, but the Washington Post reported yesterday that it would be worth around $2.25tn, with the focus on physical infrastructure, housing, clean energy and manufacturing, among others," senior Deutsche Bank strategist Jim Reid and his team wrote in a morning note on Wednesday.

"Currently there is $650bn earmarked for bridges, highways and ports, while additional $300bn for housing and manufacturing separately. That comes ahead of another address scheduled for next month, in which he’ll be looking at other areas of investment such as healthcare and education. The combined cost of the two parts could reach $4tn."

READ MORE: Deliveroo shares plunge on London stock market debut

Biden is set to deliver his speech at 4.20pm ET (9.20pm UK). Treasury yields have been rising sharply ahead of the speech as traders bet the spending spree will push up inflation. Gold (GC=F) has also come under pressure.

Wall Street was bullish ahead of the speech. The S&P (^GSPC) was up 0.7% by the time Europe closed and the Nasdaq (^IXIC) had rallied 1.7%. The Dow Jones (^DJI) was flat.

Closely watched private sector data on the Chinese economy came in ahead of expectations overnight. Manufacturing and non-manufacturing PMIs produced by the China Federation of Logistics and Purchasing (CFLP) beat forecasts in March.

Asian markets were weak overnight despite the data. Japan's Nikkei (^N225) fell 0.9%, the Hong Kong Hang Seng (^HSI) slipped 0.2%, the Shanghai Composite (000001.SS) closed down 0.4% in China, and the South Korean KOSPI (^KS11) dropped 0.3%.

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