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European Shares Seen Opening On Cautious Note

stockmarkets dec21 08jul20 lt

European stocks may open lower on Wednesday as investors fret about fresh spike in coronavirus infections around the world.

The overall number of global Covid-19 cases has increased to more than 11.7 million, while the deaths have soared to over 543,000, according to the Johns Hopkins University.

More U.S. states reported record numbers of new infections, with Florida facing an impending shortage of intensive care unit hospital beds. California reported more than 10,000 coronavirus cases on Tuesday, a record rise for a single day.

The Australian state of Victoria saw another record rise in daily coronavirus cases, which led to lockdown measures being reimposed in Melbourne, the country's second-biggest city.

Dr Michael Ryan, emergencies chief of the WHO said the rise in cases was not due to widespread testing, but because the epidemic was "accelerating."

Also, the WHO on Tuesday acknowledged the emerging evidence of airborne spread of the novel coronavirus after an open letter by over 200 scientists outlined evidence that showed floating virus particles can infect people who breathe them in.

Asian markets are trading mixed as investors adopted a cautious approach ahead of the earnings season. Oil prices eased on oversupply fears while gold hovered near a 8-1/2 year high.

Brazil's currency and stocks slumped after President Jair Bolsonaro said he had tested positive for Covid-19. The dollar held onto gains, with analysts saying that a move to undermine Hong Kong's longstanding U.S. dollar peg is highly unlikely to become reality.

U.S. stocks fell sharply overnight as several Fed officials warned of challenges to the economy, New York and New Jersey added three more states to their travel advisory, and the U.S. began formal withdrawal from the World Health Organization.

Meanwhile, Vice President Mike Pence's top aide said during an interview with Bloomberg Radio that the Trump administration wants Congress to cap the next Covid-19 stimulus package at $1 trillion or less.

The Dow Jones Industrial Average dropped 1.5 percent and the S&P 500 declined 1.1 percent to snap its five-day winning streak, while the tech-heavy Nasdaq Composite shed 0.9 percent.

European markets pulled back on Tuesday after the European Commission lowered its view for Eurozone GDP growth.

The pan European Stoxx 600 eased 0.6 percent. The German DAX gave up 0.9 percent, France's CAC 40 index declined 0.7 percent and the U.K.'s FTSE 100 fell 1.5 percent.

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