European Stocks are in Doldrums amid Virus Spread and Economic Recovery
European stock futures are steady in Wednesday trade amid trader’s optimism over the economic recovery and increasing business activities. All the key European market indices ended the Tuesday trade in the red after generating gains on Monday.
The Tuesday selloff was supported by trader’s concerns over the massive growth in virus infections in California and a few other states.
California Gov. Gavin Newsom stated on Monday that indoor operations will remain shut at restaurants, museums, and bars, while the Los Angeles and San Diego school districts suggested students to attend online classes.
The pan-European Stoxx 600 dropped 1% on Tuesday. The index is pulled back by losses from tech stocks while the majority of sectors slipped into negative territory.
“In several countries across the world, we are now seeing dangerous increases in Covid-19 cases, and hospital wards filling up again,” World Health Organization Director-General Tedros Adhanom Ghebreyesus warned.
“It would appear that many countries are losing gains made as proven measures to reduce risk are not implemented or followed,” he added.
Trader’s concerns over the virus spread have also been weighing on economic reports. In the UK, GDP (gross domestic product) jumped by 1.8% in May compared to the historic contraction of 20.4% in April.
China, the world’s second-largest economy, also reported a sharp growth in exports for the month of June, which is among the signs of a strong recovery. Earlier this week, the German finance minister said that they have passed the lowest point and the country is on the verge of steady recovery.
What does it mean?
- European stock futures are in green.
- US stock market future extended Tuesday gains.
- EUR USD pair surged to multi weeks high.
- Crude oil prices soared on economic recovery reports.
- Gold surged to a fresh eight-year high.