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European Markets Close Lower With Coronavirus Spread, Georgia Runoff in Focus

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  • European investor sentiment was hit by concerns over the speed of coronavirus vaccine deployment in mainland Europe and a third national lockdown in England.
  • Oil and gas stocks surged 3.6% amid a spike in oil prices and reports of a crude output compromise between Saudi Arabia and Russia.

European stocks closed lower on Tuesday as investors monitored the coronavirus pandemic and the imposition of further restrictions, along with a U.S. Senate runoff election in Georgia.

The pan-European Stoxx 600 ended down 0.2% after fluctuating either side of the flatline throughout the trading day. Utilities fell 1.3%, while oil and gas stocks surged 3.6% amid a spike in oil prices and reports of a crude output compromise between OPEC kingpin Saudi Arabia and non-OPEC leader Russia.

European investor sentiment was hit by concerns over the speed of coronavirus vaccine deployment in mainland Europe, and a third national lockdown that has been imposed in England.

The country on Tuesday entered its toughest nationwide lockdown since last March, with schools closed until mid-February. In a televised address Monday night, Prime Minister Boris Johnson warned that the weeks ahead "will be the hardest yet." Hopes are being placed on the speedy rollout of the Pfizer/BioNTech vaccine, and Oxford University-AstraZeneca's vaccine, that began on Monday.

Germany is also expected to extend its own lockdown measures later Tuesday. According to media reports, the current restrictions — which include the closure of schools, retailers and restaurants — are all set to continue until at least the end of January.

In Asia, shares of Chinese telecommunications giants surged in Tuesday trade after the New York Stock Exchange announced it will no longer delist three firms. Shares in other Asia-Pacific markets were mostly higher.

On Wall Street, the S&P 500 rose slightly after a sharp sell-off on Wall Street marked the start of 2021. The broad market comes ahead of Tuesday's Georgia runoff elections, which will determine whether Republicans can hold on to control in the Senate. Rising Covid-19 cases globally and new lockdown restrictions are also keeping investors on edge.

In terms of individual share price action, British retailer Next saw its shares gain 8% after a Christmas trading update. Full-price sales fell just 1.1% from the same period last year, vastly outstripping October's projection of an 8% decline.

Aveva Group climbed 7% after UBS upgraded the British IT company's stock to "buy" from "neutral" and raised its target price.

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