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European Shares Likely To See Tepid Start

stockmarkets jan18 18jan21 lt

European stocks may open lower on Monday, with surging coronavirus cases, worsening U.S.-China tensions and China data likely to be in focus.

Asian stocks remain broadly lower, with Chinese and Hong Kong markets bucking the weak regional trend, after Chinese GDP and industrial output data beat forecasts.

China's GDP climbed 6.5 percent year-on-year in the fourth quarter of 2020, the National Bureau of Statistics said - exceeding expectations for an increase of 6.1 percent and up from 4.9 percent in the three months prior.

Industrial production jumped an annual 7.3 percent in December, beating forecasts for 6.9 percent and up from 7.0 percent in November.

Retail sales gained an annual 4.6 percent last month, missing expectations for 5.5 percent and down from 6.0 percent in the previous month.

Fixed asset investment gained 2.9 percent year to date in December, missing expectations for 3.2 percent but still up from 2.6 percent in November.

Sino-U.S. tensions remain on investors' radar after the Trump administration notified several Huawei suppliers that it's revoking their licenses to work with the Chinese firm.

On the Covid-19 front, the number of coronavirus cases confirmed all over the world has surpassed 95 million as the vaccination drive gains pace.

China reported more than 100 new Covid-19 cases for the sixth consecutive day, while the number of hospitalized Covid-19 patients with serious symptoms in Japan topped 970, marking a record high since the onset of the pandemic in the country.

Gold hit its lowest level in 1-1/2 months on a firmer dollar ahead of Joe Biden's swearing-in as the 46th U.S. president on Wednesday. Oil prices dropped about 1 percent in Asian deals.

U.S. stocks sank on Friday, reflecting a negative reaction to earnings news from financial giants Wells Fargo, Citigroup and JPMorgan Chase and data showing a continued decline in retail sales in December.

The Dow Jones Industrial Average dropped 0.6 percent, the S&P 500 shed 0.7 percent and the tech-heavy Nasdaq Composite gave up 0.9 percent.

European markets ended firmly in negative territory on Friday as growing tensions between Beijing and Washington coupled with rising Covid-19 cases in Europe and China raised concerns about the durability of the global economic recovery.

The pan European Stoxx 600 fell 1 percent. The German DAX lost 1.4 percent, France's CAC 40 index declined 1.2 percent and the U.K.'s FTSE 100 shed 1 percent.

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