September 29, 2020 at 09:53AM

European shares slipped on Tuesday as investors awaited the first U.S. presidential debate and eyed progress of a fiscal stimulus package in Washington. The broader Euro STOXX 600 fell 0.4%, eroding hefty gains from a day earlier, with indexes in Frankfurt, Paris and London each losing between 0.4%-0.5%. Among the sectors in negative territory: growth-sensitive banks, automakers and travel & leisure, all down between 0.7% and 0.9%.

Investors are weighing the potential impact on the U.S. economy of either the re-election of President Donald Trump or a victory for Democratic presidential nominee Joe Biden. Many see a Biden victory increasing the chances of further fiscal stimulus to counter the economic damage from the coronavirus pandemic, judging such a scenario would be a boon for stocks.

Biden’s campaign has seized on a fresh line of attack on the eve of the debate with Trump – set for after the U.S. market close – accusing the Republican incumbent of gaming the system to avoid paying his fair share of taxes. U.S shares were set to open lower, with futures for the S&P 500 and Nasdaq giving up earlier gains to slip into negative territory. Hard-hit sectors like hotels, banks and airlines had made strong gains on Monday.

The MSCI world equity index, which tracks shares in nearly 50 countries, was flat. As the global death toll from COVID-19 rose past 1 million, according to a Reuters tally, investors have remained focused on prospects for a stimulus package to help the U.S. economy recover from the damage wrought by the virus.

Also in focus was economic data due later in the day that is set to shed light on the U.S. economy’s progress, with consumer confidence and home price data on the agenda. The dollar held steady against a basket of currencies at 94.185, drifting away from a two-month high of 94.745 reached last week. The pound gained 0.2%, fetching $1.2863, just below the $1.2930 mark touched overnight. Against the euro, sterling changed hands at 90.775 pence.

Global Markets: Shares slip as U.S. presidential debate looms, Reuters, Sep 29

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