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Investing.com – European stock markets are seen edging higher at the open Tuesday, rallying after Monday’s sharp losses, but the growing incidence of coronavirus cases continues to cast a shadow over the region.
At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.2% and the FTSE 100 futures contract in the U.K. rose 0.2%.
Wall Street closed substantially lower on Monday, with the Dow Jones Industrial Average falling 2.3% overnight, the S&P 500 losing 1.9%, while the Nasdaq Composite dropped 1.6%. This followed weakness in Europe, with the DAX ending down 3.7%, the CAC 1.9% lower and the FTSE 100 off 1.2%.
The number of Covid-19 cases continued its incessant rise, with over 43.4 million cases globally as of Oct. 27, according to Johns Hopkins University data.
Europe has been hard hit by this second wave of the virus, with France, for example, on Monday seeing the highest number of coronavirus patients going into hospital since April. This has resulted in a number of countries imposing new restrictions–Spain has announced a state of emergency for six months–curtailing economic activity.
This increases expectations of action by the European Central Bank when its governing council meets on Thursday, although the consensus view is that the bank will only announce fresh stimulus at its December meeting.
An additional source of concern for the markets is the fading prospect of a new U.S. coronavirus relief package. House Speaker Nancy Pelosi said Monday that she remained hopeful an agreement can be reached before the Nov. 3 elections, but this looks increasingly unlikely.
In corporate news, HSBC (LON:HSBA) is likely to be in the spotlight after the banking giant reported third-quarter pretax profit of $3.1 billion, a smaller-than-expected 35% drop from a year earlier The U.K.-based, Asian-focused bank also signaled a quick return to dividend payments.
Rival Banco Santander (MC:SAN) also beat expectations, recording third-quarter net profit of 1.75 billion euros ($2.1 billion), a strong bounce after posting the first loss in its 163-year history in the second quarter.
Oil prices edged higher Tuesday, rebounding to a degree after Monday’s hefty losses, but the surge in coronavirus cases in the U.S. and Europe means sentiment remains gloomy.
Hurricane Zeta is due to make U.S. landfall on Wednesday, with rigs and refineries shutting down in preparation for its arrival, while traders also await crude oil supply data from the American Petroleum Institute, due later in the session.
U.S. crude futures traded 1.1% higher at $38.98 a barrel, while the international benchmark Brent contract rose 1.1% to $41.27. Both contracts fell more than 3% on Monday.
Elsewhere, gold futures rose 0.2% to $1,909.80/oz, while EUR/USD traded 0.2% higher at 1.1828.
