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Stocks - Europe Edges Lower as Wirecard Withdraws Accounts, Guidance

By Peter Nurse - European stock markets weakened Monday, with investors fretting about the rising number of coronavirus cases and the damage this could do to the economic recovery.

At 3:40 AM ET (0740 GMT), the DAX in Germany traded 0.3% lower, France's CAC 40 fell 0.2%, the U.K.'s FTSE index was down 0.2%.

The World Health Organization reported a record jump in global coronavirus cases on Sunday, with the biggest increase seen in North and South America.

Johns Hopkins University reported over 8.9 million cases globally and over 468,000 deaths as of June 22.

"The potential economic damage of a new round of Covid-19 countermeasures will likely contain any investor enthusiasm," said Michael McCarthy, chief market strategist at CMC Markets.

After a brutal sell-off earlier this year, share prices had risen globally over the past three months, helped by massive stimulus around the world and hopes the worst of the pandemic was over.

More stimulus is likely, although the EU leaders failed to agree on a 750 billion euros recovery fund for the coronavirus crisis last week. This was widely expected given several northern European nations had been vocal in their opposition to the plan to pay out the majority of this stimulus in grants instead of loans.Economic indicators are thin on the ground Monday, but a report on consumer confidence in the euro zone will provide a snapshot of how quickly sentiment is recovering as economies gradually reopen.

In corporate news, Wirecard (DE:WDIG) stock slumped 45% after the board of the scandal-hit payments firm said Monday that the 1.9 billion euros missing from its accounts simply may not exist.

The German company also said it was withdrawing its financial results for 2019 and the first quarter of 2020. It also said it was still in "constructive talks" with its lenders about extending its current debt facility.

Capita (LON:CPI) stock climbed 8.2% after signing a deal with Irish Water worth up to 50 million euros over the next five years.

Elsewhere, there have been a number of reshuffles in the components of the major European indices. 

EasyJet (LON:EZJ) stock dropped 1% after leaving the FTSE 100, while Kingfisher (LON:KGF) jumped 2.8% after entering the U.K.’s main index. In France, Sodexo (PA:EXHO) dropped 1.8% after leaving the CAC 40, to be replaced by Teleperformance (PA:TEPRF), up 1.9%. While in Germany, Deutsche Wohnen (DE:DWNG), up 1.2%, replaced Deutsche Lufthansa (DE:LHAG), which was down 4.6% amid further haggling over its proposed bailout.

Oil prices edged higher Monday, helped by the news that the number of operating oil and natural gas rigs operating in Canada and the U.S. fell to a record low last week. Gains in futures are limited amid concerns that a record rise in global coronavirus cases could curb a recovery in fuel demand.

At 3:40 AM ET, U.S. crude futures traded 0.4% higher at $39.98 a barrel. The international benchmark Brent contract rose 0.6% to $42.42.

Elsewhere, gold futures rose 0.3% to $1,757.55/oz, while EUR/USD traded at 1.1204, up 0.3%.

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