European stock futures edge lower; China’s COVID surge weighs

By Peter Nurse

Investing.com – European stock markets are expected to open marginally lower Tuesday as a surge in COVID cases in China weighed on growth expectations for the world’s second-largest economy.

At 02:00 ET (07:00 GMT), the contract in Germany traded 0.3% lower, in France dropped 0.1%, and the contract in the U.K. fell 0.1%.

China is struggling with a new outbreak of COVID cases in a number of cities, which resulted in its first COVID-related death in almost six months over the weekend.

This has sparked concern that the country could see a return of widespread mobility restrictions, weighing on economic activity in the region’s main growth driver and a major export market for Europe’s companies.

At the same time, inflation in the soared past 10% at the end of last month, up from 9.9% in September, which will see the European Central Bank continuing to hike interest rates, weighing on economic expansion in the region.

The has ratcheted up rates by 200 basis points since July, and another increase is widely expected in December.

The Organisation for Economic Cooperation and Development will publish its latest economic outlook later Tuesday. The Paris-based policy forum was especially pessimistic about the outlook in Europe in September, and it’s difficult to see how the situation could have improved in the intervening period.

The U.K. reported smaller than expected for October, a welcome surprise after Chancellor Jeremy Hunt last week announced tax hikes and spending cuts to fix the country’s balance sheet.

In corporate news, Danish drug maker Novo Nordisk (CSE:) announced plans to expand its existing facilities in Bagsværd, Denmark, with the project expected to be finalized in 2024 and create about 160 new jobs.

Oil prices edged higher Tuesday, stabilizing after hefty falls on demand worries as China’s COVID cases rise and global recession concerns grow, while attention turns to the next meeting of top producers to determine output levels.

The oil market had seen some volatility Monday as traders prepared for next month’s meeting of the Organization of the Petroleum Exporting Countries and its allies, after the group, known as OPEC+, cut its planned output levels by 2 million barrels a day in October.

The Wall Street Journal reported on Monday that OPEC+ would consider an increase of up to 500,000 barrels per day at its December meeting, but this report was quickly denied by Saudi Arabian energy minister Prince Abdulaziz bin Salman, the de facto leader of the group, who said the kingdom is sticking with output cuts and not discussing a potential oil output increase.

By 02:00 ET, futures traded 0.1% higher at $80.14 a barrel, while the contract rose 0.3% to $87.67.

Additionally, rose 0.2% to $1,740.60/oz, while traded 0.1% higher at 1.0252.

[ad_2]

Source link