European Stock Futures Again in Red Amid Economic Worries
European stock futures are again in red on Friday as investor’s concerns increased about the economic growth prospects and how the governments would introduce the second stimulus package to aid the economies.
The government of the UK has already introduced a second stimulus package worth £30 billion. The market analysts argue that the volatility over the last couple of days was mainly due to the battle between stimulus hopes and virus fears.
“Throw Brexit into the mix (what may be the crucial EU Heads of State meeting is on Oct. 15-16) and a potential spike in business failures as we go through Q3 into Q4, and politically, as well as economically, the odds move even more in favor of a much larger fiscal response later in the year,” said David Owen, European economist at Jefferies.
European stock market indices reported small gains on Thursday after two consecutive days of losses. The Stoxx Europe 600 index rose 0.4% on Thursday, thanks to sharp gains from German business software giant SAP. The shares of SAP soared close to 7% as its second-quarter adjusted operating profit rose 8% compared to the previous year period.
French stock market index CAC 40 grew 0.4% on Thursday and the U.K.’s FTSE index increased only 0.1%.
The business environment in European countries stabilized in the past month as Germany reported a 9% growth in exports for the Month of May when compared to April. In addition, the analysts expect the June numbers to increase sharply from the previous two months.
What Does It Mean for the Markets?
- Euro Stoxx 50 futures dropped 13 points.
- FTSE 100 futures slipped 24 points.
- MSCI’s broadest index of Asia-Pacific fell 0.76%.
- Australian stock market plunged 0.42%.
- Euro struggled against USD and other currencies.
- Euro also dropped against British Pound.