(Amended: Corrects 8th paragraph to say China and South Korea remained closed for holidays)
European stocks are expected to open positive despite negative sentiment surrounding the Chinese property giant China Evergrande. However, the gains could be limited as markets worldwide wait for central bank actions during the week on easing of stimulus and interest rate trajectory.
Overnight, the U.S. benchmarks had closed weaker as China Evergrande fiasco exacerbated the anxiety surrounding the imminent tapering of the monetary stimulus and the likely monetary tightening expected to be unveiled on September 22. Anxiety precipitated as interest payments on the company’s bonds are due later in the week and fears of a contagion, given the offshore bond exposures added to the risk aversion. Nasdaq-100 shed 2.10 percentage to close at 15,012.19, whereas Dow Jones Industrial Average declined by a massive 614 points or 1.78 percent to end at 33,970.47.
On Monday, a sea of red had descended on the major European bourses as systemic risk, debt default and contagion became talking points in the context of the looming debt crisis in Hong-Kong listed China Evergrande. German DAX-30 was the worst performer by declining nearly 2.9 percent. France’s CAC-40 lost 1.74 percent; pan-European Stoxx 600 shed 1.67 percent; Switzerland’s SMI 20 corrected by 1.42 percent; and U.K.’s FTSE100 shed 0.86 percent.
Dollar index is currently at 93.19 versus 93.28 on Monday. The EURUSD pair is hovering near 1.1731 versus the previous close of 1.1725. The GBPUSD pair is at 1.3670 as compared to the previous close of 1.3657.
Gold futures for December settlement are trading at $1761.60 per troy ounce, about 0.12 percent lower than the previous close.
WTI Crude for November settlement is trading at $70.80, up 0.94 percent from the previous close. Brent Crude for November settlement is trading at $74.50, up 0.78 percent from the previous close. The uptick is attributed to tightness in supplies from the U.S.
American Nasdaq 100 stock futures is currently in mild positive territory with an uptick of 0.49 percent. The Dow Jones Futures too is currently trading at a gain of 0.65 percent.
Asian markets are trading mixed on Tuesday morning. Japan’s Nikkei 225 is trading lower by 1.77 percent. Hong Kong’s Hang Seng is declining by 0.48 percent, and New Zealand’s NZX 50 is down 0.15 percent. Australia’s ASX 200 is gaining 0.31 percent and India’s Sensex is trading up 0.03 percent. Markets in China and South Korea remained closed for holidays.
Earnings updates are due today from London-headquartered home improvement products business Kingfisher plc, Orpea SA, a France-based retirement homes provider; Learning Technologies Group plc, a United Kingdom-based company that provides learning and talent software; United Kingdom-based Kape Technologies PLC that develops and distributes digital products in the online security space, etc.
Switzerland’s Balance of Trade numbers for August are due today. Analysts expect the same to narrow to CHF 3.6 billion from the previous month’s reading of CHF 4.1 billion. U.K.’s Office for National statistics is scheduled to release the Public sector net borrowing number for August. The borrowing number is expected to escalate to 14.2 million pounds, from 10.4 million pounds in the month of July. Confederation of British Industry’s Order Book Balance for September which is slated for release today is forecast at 15 compared to 18 in the month of August.
Markets would however be anxiously awaiting U.S. Fed’s interest rate decision on 22nd September and Bank of England’s interest rate decision due on 23rd September.
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