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European Shares Seen Opening On Positive Note

stockmarkets jan23 26jun20 lt

European stocks look set to open flat to slightly higher Friday as investors react to the results of the Federal Reserve's stress tests on financial institutions.

The Federal Reserve said the nation's biggest banks are healthy but could suffer up to $700 billion in losses on soured loans if the economy languishes. The Fed ordered them to cap dividends and suspend share buybacks to conserve funds.

Asian markets followed Wall Street higher even as worries remained about the ever-rising number of Covid-19 cases.

The total number of global coronavirus cases stood at 9.6 million as of June 26, according to Johns Hopkins University data. Texas announced a delay to its re-opening as infections and hospitalizations surged in the state.

Meanwhile, the U.S. Senate passed a bipartisan bill by unanimous consent that would impose sanctions on China for its decision to implement national security laws in Hong Kong and Macau.

The National People's Standing Committee is due to convene over the weekend, with the laws expected to be enacted before the end of the month.

The dollar held firm against a basket of currencies and gold remains on track for a third weekly gain, while oil prices rose over 1 percent on optimism about recovering fuel demand worldwide.

In economic news, consumer sentiment survey results from France are due later in the session, while European Central Bank President Christine Lagarde is set to speak at an online summit organized by the European Business Leaders' Convention.

Across the Atlantic, news on the coronavirus front may attract attention, overshadowing reports on personal income and spending and consumer sentiment.

U.S. stocks rose sharply overnight after regulators announced plans to ease restrictions on large banks' investments and a report showed U.S. orders for durable goods jumped in May by the most in nearly six years.

The Dow Jones Industrial Average rallied 1.2 percent, while the tech-heavy Nasdaq Composite index and the S&P 500 climbed around 1.1 percent each.

European markets ended Thursday's session higher after the European Central Bank said it would set up a new backstop facility to address the coronavirus-related euro liquidity needs among central banks outside the euro area.

The pan European Stoxx 600 advanced 0.7 percent. The German DAX rose 0.7 percent, France's CAC 40 index gained 1 percent and the U.K.'s FTSE 100 added 0.4 percent.

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