European stocks are seen opening on a cautious note Thursday as a continued surge in coronavirus cases and fresh trade tensions dimmed investors’ hopes for a quick economic turnaround.
Asian markets followed Wall Street higher, while the dollar clung on to broad overnight gains. Oil extended losses after sliding more than 5 percent in the previous session. Gold traded flat after climbing towards its highest level in nearly eight years the previous day.
The U.S. broke its record for the highest coronavirus cases recorded in a single day, with 36,358 new positives reported on Wednesday, according to a tally by NBC News.
With some southern and western states reporting record number of coronavirus cases, New York, New Jersey and Connecticut have asked visitors from nine states with high infection rates to quarantine for 14 days.
“There is a massive outbreak of Covid-19 across the state of Texas,” Governor Greg Abbott said in a television interview.
Australia recorded the biggest daily rise in cases in two months, raising concerns about a second wave of infections.
On the trade front, Brussels has criticized U.S. threats to hit $3.1bn of European products with additional tariffs as “very damaging”.
“It creates uncertainty for companies and inflicts unnecessary economic damage on both sides of the Atlantic,” EU warned in a statement.
Meanwhile, laying groundwork for new financial sanctions, the Pentagon reportedly put Huawei Technologies Co. and Hangzhou Hikvision Digital Technology Co. on the list of 20 companies it says are owned or controlled by the Chinese military.
In economic releases, Germany’s market research group GfK publishes consumer sentiment survey data later in the day. The forward-looking consumer sentiment index is forecast to rise to -12 in July from -18.9 in the previous month.
Across the Atlantic, trading may be impacted by reaction to the latest weekly jobless claims report as well as data on durable goods orders in May.
U.S. stocks slumped overnight as coronavirus cases continued to rise in several states, raising fears of a new round of lockdowns and a slower economic recovery.
The International Monetary Fund has lowered its global growth forecast for this year and next and said the pandemic was causing wider and deeper damage to economic activity than first thought.
The Dow Jones Industrial Average plummeted 2.7 percent, the tech-heavy Nasdaq Composite plunged 2.2 percent and the S&P 500 lost 2.6 percent.
European markets fell sharply on Wednesday, with a surge in coronavirus cases around the world and the U.S. threat to hit $3.1bn of European products with additional tariffs weighing on markets.
The pan European Stoxx 600 tumbled 2.8 percent. The German DAX lost 3.4 percent, France’s CAC 40 index shed 2.9 percent and the U.K.’s FTSE 100 gave up 3.1 percent.
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