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European Market Sentiment Seen Weak

stockmarkets jan18 16aug21 lt

European markets are expected to stay close to recent peaks but still remain heavily impacted by the negative sentiments of a deepening delta virus situation.


US stock futures are currently trading in red zone as drop in consumer sentiment to a decade low continues to hurt sentiments. Friday, the Dow Jones Industrial Average had closed flat at 35515 or 0.04 percent daily change whereas Nasdaq 100 had closed at 15137, up 0.32 percent. European markets had ended trading on a positive note, with the FTSE 100 gaining 0.35 percent, DAX 30 advancing 0.25 percent, CAC 40 gaining 0.20 percent, SMI20 strengthening by 0.28 percent, and the pan-European Stoxx 600 moving up by 0.21 percent.


Asian markets are trading mixed mainly due to local sentiment especially coronavirus situation. Japan's Nikkei is down around 1.81 percent whereas Hong Kong's Hang Seng is down by 0.93 percent. Australia's ASX 200 is also down by 0.45 percent closely followed by NZX 50 which is down by 0.34 percent. China's Shanghai Composite has however advanced 0.18 percent and India's Sensex also is trending higher by 0.18 percent.


Gold is currently trading at $1776.71 per troy ounce, down by 0.14 percent from Friday's levels. Friday, the yellow metal had gained almost 1.52 percent as Delta spread anxiety lingered to give strong support to gold prices amidst renewed tapering anxieties in the run-up to the release of the minutes of FOMC later in the week.


Brent Crude Oil futures for October has declined more than 1 percent from Friday's levels to breach the $70 mark per barrel. It is currently trading at $69.82, versus Friday's close of $70.59. The black liquid has been under pressure ever since the International Energy Agency warned that oil demand could be impacted by the re-emerging coronavirus scenario.


Dollar Index continues close to 92.5 levels reached on Friday. In the backdrop of the huge dip in University of Michigan's Survey of Consumer sentiment to 70.2 in August, the lowest reading since 2011, the greenback had on Friday retreated from a strong position of 93.03. Anxieties about delta spread and its potential to derail the recovery in the U.S. remained strong despite hawkish undertones from Fed as well as strong labor data that pushed the sentiment to a decade-low.


Scheduled data releases from U.K in the week are the unemployed claimant count data for July due on August 17, inflation numbers for July due on August 18, the Gfk consumer confidence number for August, and the Retail Sales numbers for July due on August 20. Euro Area awaits the employment and GDP data on August 17 and inflation data on August 18. Balance of Trade and Industrial Production numbers from Switzerland are due on August 19. But the most decisive information for the markets is likely to be the U.S. FOMC minutes due on August 18 which is expected to reveal the Fed's stance on advancing the tapering timeline.


Earnings updates are due today from Severstal, Recipharm, Bank Norwegian, Natixis, Land Securities Group, Johnson Matthey PLC, British land Company, and Sulzer etc.

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