Global shares stumbled on Friday as hopes of a fiscal boost from a $1.9 trillion US stimulus plan were smothered by the prospect of stricter lockdowns in France and Germany and a resurgence of Covid-19 cases in China.

European stocks followed Asian markets lower, with the pan-European Stoxx 600 down 0.8% and London’s FTSE 100 0.8% weaker, with the latter clobbered by data showing Britain’s economy shrank in November for the first time since the initial Covid-19 lockdown last spring.

The MSCI world equity index, which tracks shares in 49 countries, was 0.3% lower. S&P 500 e-mini futures shed 0.3% to 3,779.

Earlier on Friday, an Asian regional share index had edged near record highs after US President-elect Joe Biden proposed a $1.9 trillion stimulus plan to jump-start the world’s largest economy and accelerate its response to the coronavirus.

In prime-time remarks on Thursday, Biden outlined a proposal that includes $415 billion aimed at the Covid-19 response, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities hard hit by the pandemic.

But that initial boost later faded as risk appetite waned, lifting bond prices and the dollar, and hitting equities.

“People are saying it’s a big number but markets are almost acting like it’s a disappointment,” said James Athey, investment director at Aberdeen Standard Investments.

“I think maybe the market was pricing an additional $2,000 cheque going to the US population, but what’s being proposed is a top-up of $1,400 to take the total to $2,000 because $600 has already been agreed.”

Investors also digested the prospect of rising taxes to pay for the plan.

“The concern is what it’s going to mean from a tax standpoint,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

“Spending is easy to do but the question is how are you going to pay for it? Markets often ignore politics but they don’t often ignore taxes.”

Recovery prospects Biden’s comments came after Federal Reserve Chair Jerome Powell struck a dovish tone in comments at a virtual symposium with Princeton University.

Powell said the US central bank is not raising interest rates anytime soon and rejected suggestions the Fed might start reducing its bond purchases in the near term.

Investor concerns over the prospects for a global economic recovery were raised after France strengthened its border controls and brought forward its night curfew by two hours to 6pm for at least two weeks to try to slow the spread of infections.

German Chancellor Angela Merkel called for “very fast action” to counter the spread of variants of the coronavirus. Chinese blue chips eased 0.2%, snapping a four-week winning streak, after the country on Friday reported the highest number of new Covid-19 cases in more than 10 months.

Sentiment was also soured by a further strain in Sino-US relations after the Trump administration imposed sanctions on officials and companies for alleged misdeeds in the South China Sea and an investment ban on nine more firms.

US earnings season kicked into full swing with results from JPMorgan, Citigroup and Wells Fargo.

JPMorgan Chase & Co reported a much better-than-expected 42% jump in fourth-quarter profit on Friday, driven by the release of some of the reserves it had built up against coronavirusdriven loan losses.

Investors will be looking to see if banks are starting to take down credit reserves, resume buybacks, and provide guidance that shows the economy is improving, said Thomas Hayes, chairman of Great Hill Capital in New York.