European Markets Seen Opening With A Negative Bias

Sentiment across European markets is seen weak on Tuesday ahead of looming central bank decisions. Hawkish commentary from ECB officials and further uptick in crude oil prices is seen dragging equity indexes lower ahead of the interest rate decisions by the Federal Reserve, Bank of England, Bank of Japan as well as the Peoples Bank of China.

Wall Street had rebounded on Monday, closing the day’s trade with mild gains amidst overwhelming hopes of a pause in the Fed’s review due on Wednesday. Nasdaq Composite edged up 0.01 percent to close at 13,710.24 whereas the Dow Jones Industrial Average edged up 0.02 percent to finish trading at 34,624.30.

Hawkish statements by ECB officials dampened sentiment at the European bourses on Monday. The surge in crude oil prices and fears of renewed inflationary pressures added to the bearish market mood. France’s CAC 40 topped losses with a decline of 1.4 percent driven by a more than 12 percent plunge in the shares of Societe Generale. The pan-European Stoxx-50 and Germany’s DAX, both erased more than 1 percent. Switzerland’s SMI dropped 0.96 percent followed by U.K.’s FTSE 100 that slipped 0.76 percent.

Current indications from the European stock futures indicate a broadly negative sentiment. The CAC 40 Futures (Oct) is trading 0.25 percent lower. The DAX Futures (Dec) is currently trading 0.24 percent lower. The FTSE 100 Futures (Dec) is trading 0.19 percent lower. The pan-European Stoxx 50 Futures (Dec) has shed 0.12 percent. The SMI Futures (Dec) is trading flat.

American stock futures imply mild losses on opening. The US 30 (DJIA) is trading 0.04 percent lower, whereas the US500 (S&P 500) is trading 0.07 percent lower.

Asian stock markets are trading on a mostly negative note. Japan’s Nikkei 25 has slipped 0.94 percent. South Korea’s KOSPI has plunged 0.68 percent. New Zealand’s NZX 50 has slipped close to half a percent. Australia’s S&P ASX 200 has dropped 0.43 percent. Hong Kong’s Hang Seng has erased 0.24 percent. China’s Shanghai Composite has slipped 0.11 percent.

The Dollar Index (DXY), a measure of the U.S. dollar’s strength relative to six currencies, edged lower, declining 0.02 percent to 105.18 versus the previous close of 105.2. The EUR/USD pair has decreased 0.12 percent to 1.0677 whereas the GBP/USD pair has slipped 0.07 percent to trade at 1.2374.

Ahead of the central bank reviews, gold futures prices are 0.08 percent below the flatline. Gold Futures for December settlement is trading at $1,951.85 per troy ounce, versus the previous close of $1,953.40.

Supply concerns fueled the surge in crude oil prices. Brent Crude Futures for November settlement increased 0.55 percent to $94.95 whereas WTI Crude Futures for November settlement surged 0.67 percent to $91.19.

Final readings of inflation for the month of August are due from the Euro Area later in the day. Speeches from officials of European Central Bank as well as Bundesbank are also scheduled for the day which would be keenly watched for possible monetary policy cues.

Earnings updates due from the region on Tuesday include Ocado, Kingfisher, Hargreaves Lansdown, Alba, Renishaw and Serica.

Source: Read Full Article