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European Shares Seen Opening On Cautious Note

stockmarkets jan23 03jul20 lt

European stocks are seen opening slightly lower on Friday, with trading volumes likely to remain thin amid the Independence Day holiday in the U.S.

Asian markets pared early gains as investors weighed an upbeat U.S. jobs report against concerns about a new swine flu virus that has jumped from pigs to humans in China.

Meanwhile, coronavirus cases are rising in 37 out of 50 U.S. states including Florida, which confirmed more than 10,000 new cases on Thursday.

The United States reported more than 55,000 new Covid-19 cases on Thursday, topping the previous single-day record of 54,771 set by Brazil on June 19.

U.S.-China tensions persist, with more than 75 U.S. senators and House members on Thursday urging the Trump administration to make a formal determination on whether China's treatment of Muslim Uighurs and other groups constitutes an atrocity.

The U.S. State Department has warned top American companies including Amazon.com Inc , Walmart Inc and Apple Inc over risks faced from maintaining supply chains associated with alleged human rights abuses against Uighurs in China's Xinjiang province.

On the data front, China's service sector expanded strongly in June on improving market conditions following the easing of coronavirus related measures, survey data from IHS Markit showed.

The Caixin services Purchasing Managers' Index rose to 58.4 in June from 55.0 in May. The rate of expansion was the fastest since April 2010.

Total new orders advanced at the quickest pace since August 2010 and new export work expanded for the first time since January. The composite output index rose to 55.7 in June from 54.5 in May.

Final composite Purchasing Managers' survey data from euro area is due later in the session, headlining a busy day for the European economic news.

The dollar steadied while oil prices dipped in Asian deals on demand worries.

U.S. stocks eked out modest gains overnight after data showed the economy added more jobs than expected in June to set a second consecutive record. Massive rehiring sent the jobless rate down to 11.1 percent from 13.3 percent in May.

Economists said they are cautiously optimistic about the numbers and the employment numbers are still well below pre-pandemic levels.

The tech-heavy Nasdaq Composite index gained half a percent to reach a fresh record closing high. The Dow Jones Industrial Average rose 0.4 percent and the S&P 500 added half a percent.

European markets showed strong moves to the upside on Thursday, with sentiment boosted by continued optimism about a potential coronavirus vaccine and encouraging economic data from across the globe.

The pan European Stoxx 600 surged 2 percent. The German DAX jumped 2.8 percent, France's CAC 40 index climbed 2.5 percent and the U.K.'s FTSE 100 advanced 1.3 percent.

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