European Shares May See Cautious Gains At Open As China Data Disappoints
European stocks are likely to open on a steady note Wednesday after major U.S. indexes rebounded overnight from a recent losing streak.
The upside, however, may remain capped as investors fret about China’s economic recovery.
Profits at China’s industrial firms tumbled 18.8 percent year-on-year in the first five months of 2023 amid a stumbling post-COVID economic recovery, data showed earlier today.
Elsewhere, Australian inflation rose less than expected in May, easing fears that the Reserve Bank will again raise interest rates.
Asian stocks traded mixed, with Chinese, Hong Kong and South Korean markets declining on concerns about the outlook for China’s economic growth.
Oil and gold prices edged up slightly on a weaker dollar. U.S. Treasury bond yields were trading mixed after rising in the last two consecutive days on expectations that the Federal Reserve has further to go in tightening monetary policy.
Trading later in the day may be impacted by reaction to remarks by Fed Chair Jerome Powell, who is due to participate in a panel discussion at the European Central Bank Forum on Central Banking 2023 in Sintra, Portugal.
Later in the week, the U.S. Commerce Department is due to release its report on personal income and spending for May, which includes a reading on inflation said to be preferred by the Federal Reserve.
U.S. stocks advanced overnight amid economic optimism on the back of positive economic data.
New orders for key manufactured capital goods unexpectedly rose in May, sales of new single-family homes surged in the month and a measure of U.S. consumer confidence surged to a near 1-1/2 year high in June, helping ease concerns about an impending recession.
The Dow gained 0.6 percent to snap a six-session losing streak, while the S&P 500 climbed 1.2 percent and the tech-heavy Nasdaq Composite rallied 1.7 percent.
European stocks finished Tuesday’s session slightly higher, as reports about the likelihood of additional Chinese stimulus offset hawkish remarks from ECB President Christine Lagarde.
The pan European STOXX 600 ended flat with a positive bias. The German DAX edged up 0.2 percent, the U.K.’s FTSE 100 inched up 0.1 percent and France’s CAC 40 rose 0.4 percent.
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