European Stocks Waver; Pound Sinks on Brexit Woes

European stock markets wavered Thursday and the British pound dived on the growing risk of a no-deal Brexit after the latest trade talks floundered in Brussels, dealers said.

Oil prices surged higher however, with the contract for Brent crude hitting $50 for the first time in nine months as traders look for economic activity to pick up in the wake of coronavirus vaccines being rolled out.

Meanwhile, the European Central Bank (ECB) unveiled its latest economic forecasts after providing more stimulus to help the eurozone withstand the impact of the coronavirus pandemic. 

Equity gains were curbed by politicians' inability to reach agreements on post-Brexit trade arrangements, while surging Covid-19 cases offset to some extent the  effect of the vaccine rollout.

Sterling slid against the euro and dollar after British Prime Minister Boris Johnson and European Commission chief Ursula von der Leyen failed to find common ground in Wednesday's crunch talks.

On Thursday however, the ECB made good on chief Christine Lagarde's indications that extra support was on the way.

The bank boosted its main virus-fighting tool, the pandemic emergency bond-buying program (PEPP), by 500 billion euros ($600 billion) to 1.85 trillion euros and extended the scheme from June 2021 to March 2022.

The ECB's main interest rates also remained at historic lows.

London was up by 0.3 percent in afternoon trading, with the weaker pound boosting the FTSE 100 index because it lifts share prices of multinationals earning in dollars.

In the United States, new applications for unemployment benefits surged to 853,000, far higher than analysts had expected.

US inflation ticked up by 0.2 percent in November, government data also showed, too little to prompt action by the US Federal Reserve.

- Britain, EU 'remain far apart' -

Back in Europe, after eight months of negotiations and with just three weeks until a deadline on reaching a post-Brexit deal, Brussels and London remained stuck on various issues including fishing rights and rules for fair trade.

"We had a lively and interesting discussion on the state of play across the list of outstanding issues," Von der Leyen said in a statement after dinner with Johnson at her Brussels' headquarters. "We gained a clear understanding of each other's positions. They remain far apart."

- Key figures around 1400 GMT -

London - FTSE 100: UP 0.3 percent at 6,584.19 points

Frankfurt - DAX 30: DOWN 0.7 percent at 13,243.75

Paris - CAC 40: DOWN 0.3 percent at 5,529.89

EURO STOXX 50: DOWN 0.6 percent at 3,508.77

New York - Dow: DOWN 0.2 percent at 30,009.64

Tokyo - Nikkei 225: DOWN 0.2 percent at 26,756.24 (close)

Hong Kong - Hang Seng: DOWN 0.4 percent at 26,410.59 (close)

Shanghai - Composite: FLAT at 3,373.28 (close)

Pound/dollar: DOWN at $1.3320 from $1.3399 at 2200 GMT

Euro/pound: UP at 91.28 pence from 90.16 pence

Euro/dollar: UP at $1.2157 from $1.2104

Dollar/yen: UP at 104.24 yen from 104.16 yen

West Texas Intermediate: UP 2.7 percent at $46.73 per barrel

Brent North Sea crude: UP 2.6 percent at $50.14 per barrel