European Shares Set For Positive Start
European stocks are seen opening a tad higher on Wednesday despite softer China data and signs of COVID-19 surge in parts of Asia and Europe.
A top European health official has warned of rising illness levels, along with an increase in deaths, in several countries.
A private gauge of China’s manufacturing fell to its lowest level in a year-and-a-half in August, raising doubts as to whether the pace of economic recovery from COVID-19 has peaked due to the prospect of less expansive stimulus and the spread of the Delta variant of COVID-19.
China Evergrande Group warned that it risks defaulting on borrowings, leaving a mark on investor confidence for the country’s riskiest borrowers in the international bond markets.
Beijing’s widening regulatory crackdown also remained on investors’ radar after President Xi Jinping chaired a high-level meeting that backed further regulatory tightening in certain sectors.
Asian markets traded mostly higher as Chinese technology stocks rebounded amid bets that the worst of Beijing’s regulatory crackdown may have passed.
The U.S. dollar pinned near three-week lows and gold held steady as investors awaited a key U.S. jobs report for clues on when the Federal Reserve might start reducing its pandemic-era stimulus.
Oil prices traded flat ahead of an OPEC+ meeting, at which major producers will decide whether to go ahead with their plan to add supply.
Final manufacturing Purchasing Managers’ survey results and unemployment data from euro area are due later in the session, headlining a busy day for the European economic news.
Across the Atlantic, reports on private sector employment and manufacturing activity may attract attention, although trading activity may remain somewhat subdued ahead of the release of the more closely watched monthly jobs report due on Friday.
U.S. stocks ended slightly lower overnight but logged strong gains for August on continued optimism over economic recovery despite uncertainty surrounding the Delta variant of the coronavirus.
The Dow and the S&P 500 slipped around 0.1 percent each as a survey showed consumer sentiment tumbling to near decade lows in August on the back of rising gas and food prices. The tech-heavy Nasdaq Composite ended largely unchanged.
European markets ended lower on Tuesday as inflation in the euro zone hit a 10-year high and ECB Governing Council member Rob Holzmann said the central bank should start thinking about reducing pandemic aid.
The pan European Stoxx 600 declined 0.4 percent. The German DAX dropped 0.3 percent, France’s CAC 40 index slipped 0.1 percent and the U.K.’s FTSE 100 eased 0.4 percent.
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