European Stock Futures Steady Despite Asian Markets Retreat
European stock futures are slightly higher after hitting four months high on Wednesday amid the EU stimulus package. The European leaders agree on a 750bn euros stimulus package to help struggling member companies in the form of grants and loans.
Along with clinching a historic deal, the EU agreed on a 1.1-trillion-euro budget for 2017-2021, which the member countries believe would be helpful in tackling the steepest recession since World War Two.
“It will have a long-term impact in the sense that if the European Union finds itself in a similar situation in the future, then markets will expect that governments will come to the rescue.”
Oil companies were among the biggest gainers as the economic recovery has been steadily boosting oil prices and demand. The German blue-chip DAX has erased all the losses that it had made since the beginning of this year. The index is in green so far this year.
The pan-European STOXX 600 grew close to 0.3% on Wednesday, which is its highest level since March.
Investor’s optimism has also been increasing in economic recovery amid positive reports related to coronavirus vaccine. This is evident from the sharp decline in a gauge of European stock market volatility index. The index plunged to its lowest since Feb. 25.
The positive earnings reports added to investors’ confidence. The stock price of Randstad Holding jumped close to 9% after reporting a smaller-than-expected decline in quarterly core earnings. Novartis was among the losers as the drugmaker has slashed its 2020 sales forecast due to production halts during the second quarter.
What Does it Mean?
- European stocks are set to extend upward momentum.
- Asian markets retreated on US-China tensions.
- Oil prices are trading well above the $40.
- Euro gained against other currencies amid optimism over the stimulus package.
- Gold surged above $1850 per ounce.