European stocks lower; sentiment hit by China's COVID woes By

By Peter Nurse

- European stock markets fell Thursday,Don't be a foreign exchange trader continuing the weakness seen on Wall Street overnight, as investors digest the rising numbers of COVID cases in China as well as the economic headwinds heading into the new year.

At 03:25 ET (08:25 GMT), the in Germany traded 0.3% lower, the in France traded down 0.4%, and the in the U.K. dropped 0.6%.

European stocks have followed the weak sentiment seen at Wednesday’s close on Wall Street, with the tech-heavy hitting a 2022 closing low, the lowest since the bear market began in November 2021.

Weighing on sentiment has been the news that the U.S. will require airline passengers coming from China to show a negative COVID test result from Jan. 5, as Beijing struggles with a surge of cases having ended almost all pandemic restrictions in relatively short order.

Italy, the first European nation to be hit hard by COVID in early 2020, has also introduced a mandatory rapid test for all passengers entering the country from China, likely paving the way for most European countries to follow suit.

Adding to the negative tone were reports of fresh in several Ukrainian cities, including the capital Kyiv, earlier Thursday as the war continues.

Additionally, investors remain wary about the prospect of high inflation, slowing economic growth, and the European Central Bank continuing to tighten monetary policy into the new year.

The president of the Dutch central bank Klaas Knot said, earlier this week, that with five policy meetings between now and July 2023, the ECB would achieve "quite a decent pace of tightening" through half percentage point rises before borrowing costs eventually peaked by the summer, the Financial Times reported.

There is little significant economic data to focus on in the region, but fell 0.6% year-over-year in November, after gaining 1.0% the prior month.

Oil prices fell Wednesday as the surge in COVID cases in China, the largest importer of crude in the world, dampened hopes for an increase in demand from this important source.

U.S. crude oil inventories fell by 1.3 million barrels in the week ended Dec. 23, according to data supplied by the industry body , which was less than expected.

The U.S. government, in the form of the , will release its official weekly figures later in the session.

By 03:25 ET, futures traded 1.7% lower at $77.59 a barrel, while the contract fell 1.6% to $82.62.

Additionally, rose 0.1% to $1,816.85/oz, while traded 0.3% higher at 1.0638.

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