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European Shares Seen Up In Cautious Trade

stockmarkets dec17 31jul20 lt

European stocks are seen opening on a positive note Friday, with tech companies likely to be in focus after U.S. technology giants Amazon, Apple, Alphabet and Facebook posted stellar earnings, defying one of the worst economic downturns on record.

The upside, however, may be capped by abysmal economic data from the United States and rising global Covid-19 cases.

Asian markets gave up early gains to turn lower despite positive economic data from China and Japan.

Data showed China's factory activity expanded in July for the fifth month in a row and at a faster pace, defying expectations of a slowdown. Industrial production in Japan rose a seasonally adjusted 2.7 percent month on month in June, snapping four months of decline.

The dollar continued to slide on renewed concerns about the strength of the American recovery, while oil bounced back from three-week lows.

Quarterly national accounts from Eurozone and other major economies are due later in the day, headlining a hectic day for the European economic news.

Across the Atlantic, traders are likely to keep an eye on the latest economic data, including reports on personal income and spending, consumer sentiment and Chicago-area business activity.

U.S. stocks ended mixed overnight as investors reacted to worrying GDP and unemployment claims figures, delay on stimulus bill and a continued surge in coronavirus cases across the world. President Donald Trump exacerbated investor nervousness by floating the possibility of delaying the U.S. presidential election.

The Dow Jones Industrial Average gave up 0.9 percent and the S&P 500 shed 0.4 percent while the tech-heavy Nasdaq Composite rose 0.4 percent ahead of key earnings for the tech sector.

Data showed the U.S. economy suffered its worst period ever in the second quarter, with GDP falling a historic 32.9 percent while initial jobless claims increased for the second straight week.

European stocks tumbled on Thursday, with dismal earnings reports, weaker-than-expected German GDP data and the Fed's warning of an uncertain economic outlook weighing on markets.

The pan European Stoxx 600 declined 2.2 percent. The German DAX plunged 3.5 percent, France's CAC 40 index lost 2.1 percent and the U.K.'s FTSE 100 plummeted 2.3 percent.

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