Stock Markets (Mar 10, 2021 02:01AM ET)
By Peter Nurse
Investing.com – European stock markets are seen opening lower Wednesday, struggling to maintain the momentum seen on Wall Street overnight amid worries of a slowing economic recovery.
On Tuesday, the tech-heavy Nasdaq Composite climbed 3.7% to post its best day on Wall Street since November, as investors poured back into popular growth names after a recent pullback.
However, this surge has failed to translate into any serious gains in Asia, with Chinese shares marginally higher after they had fallen to their lowest levels since mid-December the previous day, while in Europe the tone is one of caution ahead of Thursday’s meeting of the European Central Bank.
Eurozone quarterly GDP was revised down to -0.7% in the fourth quarter on Tuesday from the preliminary reading of -0.6% despite stronger growth from Germany, as the lockdowns across the euro area weighed on growth.
Although there are hopes that these lockdowns will be eased soon, the region will in all likelihood register a technical recession when the first quarter GDP figures are released. This puts pressure on the ECB, particularly with European bond yields edging higher, potentially resulting in tightening financial conditions.
Adding to concerns is a diplomatic spat between the U.K. and the European Union after Charles Michel, the president of the European Council, claimed the U.K. had banned all Covid-19 vaccine exports, something vehemently denied by the British government.
EU leaders have been under pressure over the slow rollout of Covid-19 vaccines on the continent, compared with the UK, where a third of the adult population have now received their first dose.
Elsewhere, the U.S. House of Representatives is likely to pass the $1.9 trillion Covid relief bill later Wednesday, allowing President Joe Biden to sign it into law by the weekend.
In corporate news, German sportswear maker Adidas (OTC:ADDYY) has predicted a strong rebound in sales in 2021, particularly in China, although its operating profit will be trimmed by costs associated with divesting the Reebok brand.
Earnings also come from the likes of fashion group Inditex (MC:ITX), sanitary products manufacturer Geberit (SIX:GEBN), security services group G4S (CSE:G4S) and construction group Balfour Beatty (OTC:BAFYY).
Oil prices weakened Wednesday, falling back from recent highs after an industry report showed a jump in U.S. oil stocks last week.
Crude inventories rose by 12.8 million barrels in the week to March 5, according to data from the American Petroleum Institute. Official figures from the Energy Information Administration are expected later Wednesday.