European stocks look set to open higher on Tuesday, though underlying sentiment is likely to remain cautious on rising fears of a coronavirus-led recession.
Health authorities reported 21 new confirmed cases of novel coronavirus in mainland China on Monday, up from 16 a day earlier. Of the new cases, 20 involved infected travelers arriving in China from abroad.
The deadly coronavirus has so far infected 181,580 people worldwide and killed more than 7,100, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University.
Asian stocks recovered from an early slide to trade mixed after the Trump administration vowed to help airlines that have been hurt by the rapid plunge in air travel bookings amid the coronavirus outbreak.
Trump is also pushing the Senate to enact a massive stimulus package to alleviate losses for businesses and individuals affected by the outbreak.
The Philippine Stock Exchange halted trading until further notice “to ensure the safety of employees and traders.”
“As the virus spreads, the case for a coordinated and synchronized global fiscal stimulus is becoming stronger by the hour,” International Monetary Fund Managing Director Kristalina Georgieva said.
The dollar rose against the yen after the Bank of Japan pumped $30.272 billion into markets with an 84-day dollar funding operation.
Elsewhere, the New Zealand government launched a NZ$12.1 billion stimulus to cushion the impact of the covid-19 on the economic activity. Gold edged lower while oil rebounded from four-year lows.
At an extraordinary meeting on Monday, the Executive Board of Riksbank decided to increase loans to banks on favorable terms and to increase quantitative easing.
In economic releases, economic confidence figures from Germany and unemployment data from the U.K. are due later in the session, headlining a light day for the European economic news.
Across the Atlantic, news on the coronavirus front is likely to remain in focus, potentially overshadowing reports on retail sales, industrial production and homebuilder confidence.
Overnight, U.S. stocks plunged to their biggest day drop in more than three decades after President Donald Trump said the coronavirus outbreak could last until July or August and that the economy “may be” heading for recession.
The Dow Jones Industrial Average plunged as much as 12.9 percent to a new three-year closing low, while the tech-heavy Nasdaq Composite gave up 12.3 percent and the S&P 500 lost 12 percent to end at their worst closing levels in over a year.
European markets ended sharply lower on Monday as the shutdown of Europe expanded drastically and data showed the coronavirus outbreak caused an unprecedented economic collapse in China
The pan European Stoxx 600 plummeted 4.9 percent. The German DAX tumbled 5.3 percent, France’s CAC 40 index plummeted 5.8 percent and the U.K.’s FTSE 100 declined 4 percent.
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