Why did European stock markets see a sell-off yesterday?

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European Stock Markets Experienced a Sell-Off Due to Fears of a Second Coronavirus Wave

European stock markets experienced a significant sell-off yesterday, marking their worst performance since July. This downturn was primarily attributed to growing concerns over a potential deadly second wave of the coronavirus. The negative sentiment was exacerbated by diminishing prospects for a new US stimulus package and political developments in the United States.
Fears of a Worsening Pandemic

The central driver behind the sell-off was the apprehension surrounding a resurgence of the coronavirus. Reports indicated that governments were implementing new containment measures to combat a second wave of infections, leading to investor anxiety about the potential economic repercussions. This fear of a widespread and severe second wave prompted a broad retreat from riskier assets across global markets.
Impact of Stalled US Stimulus Hopes

Adding to the downbeat mood was the fading hope for a new stimulus package in the United States. Negotiations for further fiscal aid appeared to be stalling, creating uncertainty about the potential for economic support. This lack of a clear path forward for stimulus measures contributed to a cautious sentiment among investors, who began to divest from equity markets.
Political Uncertainty in the US

The death of US Supreme Court Justice Ruth Bader Ginsburg also contributed to the prevailing negative atmosphere. This event, coupled with comments from a White House adviser questioning the necessity of further fiscal assistance, introduced an element of political uncertainty. Such factors can often lead to increased volatility and a sell-off in stock markets as investors react to potential shifts in policy and political stability.

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Why did European stock markets see a sell-off yesterday?

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