European stocks are seen opening a tad higher on Wednesday as ballots are still being counted in the Georgia runoffs that will determine control of the U.S. Senate and the fate of President-elect Joe Biden’s agenda.
Asian markets are trading mostly lower as caution prevailed amid a worsening coronavirus pandemic and renewed China-U.S. tensions.
As more countries implement stricter lockdowns, investors have muted growth expectations for overall global growth.
The World Bank on Tuesday downgraded its outlook for the global economy, and warned the situation could deteriorate if infections accelerate or the vaccine rollout is delayed.
The Trump administration has signed an executive order banning transactions with eight Chinese apps, saying they are a threat to U.S. national security.
About 50 Hong Kong pro-democracy figures were arrested by police today for allegedly violating a national security law.
Adding to market uncertainty was the New York Stock Exchange’s back-and-forth deliberations over whether to delist Chinese stocks on security grounds.
Gold ticked up on a weaker dollar after China announced its decision to lift its official yuan exchange rate by its highest margin since it abandoned a dollar peg in 2005.
Oil extended overnight gains, with Brent prices rising to the highest since February after Saudi Arabia pledged additional, voluntary oil output cuts.
In economic releases, the services sector in China continued to expand in December, albeit at a slower pace, the latest survey from Caixin showed with a services PMI score of 56.3, down from 57.8 in November. The composite index fell to 55.8 from 57.5 in November.
Flash consumer prices from Germany and France and final Purchasing Managers’ survey results from major euro area economies are due later in the session, headlining a busy day for the European economic news.
Across the Atlantic, the results of the Georgia runoffs are likely to attract attention along with a report on private sector employment and the minutes of the latest Federal Reserve meeting.
U.S. stocks rose overnight as energy stocks benefited from higher oil prices and a gauge of U.S. manufacturing activity rose to the highest level in nearly 2-1/2 years in December.
The Dow Jones Industrial Average gained 0.6 percent, the tech-heavy Nasdaq Composite rallied 1 percent and the S&P 500 added 0.7 percent.
European stocks ended mostly lower on Tuesday as investors fretted over the economic impact of surging coronavirus cases and tighter restrictions on movements in several countries in the continent.
The pan European Stoxx 600 slid 0.2 percent. The German DAX dropped 0.6 percent and France’s CAC 40 index eased 0.4 percent, while the U.K.’s FTSE 100 rose 0.6 percent.
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