European Shares Poised For Positive Opening

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European stocks are seen opening higher on Wednesday, as markets await more signals over the Fed's next step and watch the latest developments related to the South African variant of the coronavirus.

Asian markets rose broadly on optimism surrounding China after Chinese Vice Premier Liu He pledged enhanced support for businesses and said he's expecting a strong 2021.

A Caixin-sponsored survey showed earlier today that activity in China's manufacturing sector contracted in November for the first time in three months.

Elsewhere, Australia's Q3 GDP came in better-than-forecast, Japan's factory activity grew in November at the fastest pace in nearly four years, South Korea's factory activity expanded further in November and the Indian economy clocked a healthy growth rate of 8.4 percent in July-September.

U.K. shop prices increased for the first time in two-and-a-half years in November on rising food prices, data from the British Retail Consortium showed earlier today. The shop price index gained 0.3 percent year-on-year in November, reversing a 0.4 percent fall in October.

Final Purchasing Managers' survey results from euro area, house price data from the U.K. and German retail sales figures for October are due later in the session, headlining a busy day for the European economic news.

Across the Atlantic, trading may be impacted by reaction to reports on private sector employment and manufacturing activity.

The U.S. 10-year Treasury yield edged up but remained below 1.50 percent. The dollar index eased, helping gold recover from a one-month low. Oil attempted a recovery from a three-month low ahead of a meeting by the Organization of the Petroleum Exporting Countries.

Overnight, U.S. stocks fell sharply after Moderna CEO Stephane Bancel said that existing Covid-19 vaccines would have trouble countering the Omicron variant.

Markets saw further downside after Fed Chair Jerome Powell said during Congressional testimony that the emergence of Omicron has raised the uncertainty around inflation and that the Fed might end its pandemic-era stimulus sooner than expected.

The Dow and the S&P 500 both fell around 1.9 percent to reach their lowest closing levels in at least a month, while the tech-heavy Nasdaq Composite index shed 1.6 percent.

European stocks also ended lower on Tuesday amid increasing uncertainty over economic growth and inflation.

The pan European Stoxx 600 gave up 0.9 percent. The German DAX lost 1.2 percent, France's CAC 40 index declined 0.8 percent and the U.K.'s FTSE 100 slid 0.7 percent.

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