European Stock Fervor Seen Enduring
European stocks are expected to open strong on Wednesday amidst an anxious wait for policy hints from the U. S. Fed and slightly easing negative sentiment surrounding the Chinese property giant China Evergrande. Markets also seem to be expecting that the Fed would try to calm the markets before actually embarking on a tapering exercise.
Overnight the American stock indices had showed lackluster performance as Nasdaq-100 edged up 0.10 percentage to close at 15,027.77, whereas Dow Jones Industrial Average declined further by 0.15 percent to end at 33,919.84. “Evergrande” continued to haunt investors ahead of Thursday’s scheduled coupon payments on the embattled company’s bonds.
On Tuesday, the European markets had recovered smartly from the previous day’s sell-off as they chose to look beyond the stimulus tapering in the U.S and impending corporate debt default in China. German DAX was the best performer gaining 1.76 percent as peers like France’s CAC-40 gained 1.50 percent, U.K.’s FTSE100 rallied 1.12 percent, pan-European Stoxx 600 advanced 1.00 percent; and Switzerland’s SMI 20 edged up 0.19 percent.
Dollar index is currently at 93.25 versus 93.20 on Tuesday as the greenback remains strong ahead of the FOMC pronouncements. The EURUSD pair is hovering near 1.1724 versus the previous close of 1.1723. The GBPUSD pair is at 1.3653 as compared to the previous close of 1.3659.
Gold futures for December settlement are trading at $1779.55 per troy ounce, about 0.08 percent higher than the previous despite anxiety on whether Fed’s interest rate decision would impact the opportunity cost of holding “non-interest bearing” gold.
WTI Crude for November settlement is trading at $71.39, up 1.28 percent from the previous close whereas Brent Crude for November settlement is trading at $75.25, up 1.20 percent from the previous close. The uptick in the prices of the black liquid is attributed to reports by American Petroleum Institute earlier which showed crude oil stocks in the U.S. dropped by 6.1 million barrels in week ended September 17 as compared to a 5.4 million barrels drop in the previous week. Markets were expecting a decline of 2.4 million barrels only.
American Nasdaq 100 stock futures is currently in mild positive territory with an uptick of 0.24 percent. The Dow Jones Futures too is currently trading at a gain of 0.36 percent.
Asian markets are trading mixed on Wednesday morning. Australia’s S&P ASX 200 is higher by 0.47 percent; China’s Shanghai Composite is up by 0.34 percent; New Zealand’s NZX 50 is higher by 0.29 percent and India’s BSE Sensex is up by 0.15 percent. On the other hand, Japan’s Nikkei 225 is down by 0.50 percent. Markets in Hong Kong and South Korea are closed for local holidays.
Earnings updates are due today from technology consulting and engineering services provider Alten as well as human resources management specialist Synergie, both based in France. Results are also expected from United Kingdom-based companies like veterinary services provider CVS Group, gene and cell therapy company Oxford BioMedica, real estate investment trust UK Commercial Property Trust, consumer products company PZ Cussons and investment trust Baillie Gifford Shin Nippon.
Swiss National Bank would be releasing data on Switzerland’s current account surplus for second quarter today. The forecast is at CHF 15.1 billion as against previous reading of CHF 16 billion. The SNB quarterly bulletin is also due today, ahead of Thursday’s Monetary Policy assessment and interest rate decision.
A Non-Monetary Policy meeting of the ECB is also scheduled today.
The Euro Area Consumer Confidence Indicator for September which would indicate households and consumers expectations about the economic situation is also slated for release today. The number is forecast at -5.7 versus -5.3 in the month of August.
The Fed’s interest rate decisions as well as the FOMC’s Economic Projections would be known later in the day.
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