Stocks - Europe Mixed After Sell-Off; Consumer Mood Improves in Germany

By Peter Nurse 

Investing.com - European stock markets are set to open mixed Thursday, consolidating after the sharp selloff in the previous session aided by a rebound in consumer confidence in Germany. However,  arket confidence has been hit by increasing U.S. coronavirus cases and a global growth downgrade from the International Monetary Fund.

At 2:10 AM ET (0610 GMT), the DAX futures contract in Germany traded 0.1% higher. France's CAC 40 futures were largely flat, while the FTSE 100 futures contract in the U.K. fell 0.4%.

The GfK German consumer climate survey showed a more significant improvement in sentiment in Europe’s most important economy than expected, with the July number coming in at -9.6, compared with the expected -12, and a hefty jump from -18.6 the previous month.

Attention will turn later in the session on the release of the minutes from the last meeting of the European Central Bank’s monetary policy committee, the meeting where the central bank increased its pandemic emergency purchase programme by 600 billion euros.

The major European indices had all dropped around 3% on Wednesday, while Wall Street saw its worst day in two weeks, with the Dow Jones Industrial Average sinking more than 700 points.

The trigger for the selloff was the move from the International Monetary Fund to cut its 2020 global output forecasts further, saying the coronavirus pandemic has caused more damage to the world economy than first thought.

The IMF said it now expects 2020 global output to shrink by 4.9%, compared with a 3.0% contraction predicted in April.

However, the more important factor behind the selling was a surge in coronavirus cases in the United States, particularly in the states where restrictions were lifted early. This prompted the governors of New York, New Jersey and Connecticut to announce that visitors from states with high coronavirus infection rates must self-quarantine for 14 days on arrival, increasing fears of fresh lockdowns in the world’s largest economy.

In corporate news, Lufthansa (DE:LHAG) will be in the spotlight Thursday after the troubled airliner said it had agreed a deal with a workforce union that will save more than 500 million euros.

Bayer (DE:BAYGN) will also be in focus after agreeing to pay up to $10.9 billion to settle tens of thousands of lawsuits with U.S. plaintiffs alleging one of the company’s products causes cancer, ending a prolonged legal battle.

Oil weakened Thursday, extending the previous session’s hefty losses as record high U.S. crude inventories revived fears of a supply glut amid concerns about a hit to fuel demand from a resurgence in Covid-19 cases.

Wednesday's selloff came after U.S. government data showed crude stockpiles rose by 1.4 million barrels, driving inventories to a record high for a third straight week last week. 

At 2:10 AM ET, U.S. crude futures traded 0.9% lower at $37.67 a barrel. The international benchmark Brent contract fell 1% to $39.89.

Elsewhere, gold futures were largely flat at $1,775.25/oz, while EUR/USD traded at 1.1248, flat on the day.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App