By Peter Nurse
Investing.com – European stock markets are expected to open higher Tuesday, continuing the positive start to the new year on hopes of a steady economic recovery despite a surge in Covid-19 cases.
European indexes posted strong gains on Monday, the first trading day of the new year, with the pan-European STOXX 600 index ending at a record close. Wall Street followed suit, with the S&P 500 and the Dow Jones Industrial Average also closing at record levels, while Asia was largely on the front foot Tuesday.
Helping the tone Tuesday was the news that China’s factory activity grew at a faster pace in December. The Caixin manufacturing purchasing managers’ index came in at 50.9, the highest since June 2021, despite sporadic Covid-19 outbreaks slowing down the country’s economic recovery.
This optimism exists despite the continued uncertainty around the Covid-19 pandemic, with many European countries, as well as the U.S., reporting record numbers of daily cases, prompting the reimposition of restrictions to stop the spread of the highly contagious Omicron variant.
German retail sales rose 0.6% on the month in November, a year-on-year fall of 2.9%, an unexpected improvement from the previous month. The country’s unemployment rate for December will be in the spotlight later in the session, along with preliminary French inflation figures for the same month and the U.K. manufacturing PMI release.
In corporate news, Novartis (SIX:NOVN) is likely to be in the spotlight after a U.S. court of appeals upheld the validity of a patent for the Swiss drugmaker’s multiple sclerosis treatment Gilenya.
Elsewhere, the tech sector could be in focus after Apple’s (NASDAQ:AAPL) stock-market valuation briefly rose above $3 trillion for the first time on Monday, while Tesla (NASDAQ:TSLA) recorded strong gains after the electric-car manufacturer posted a strong fourth quarter in terms of vehicles delivered.
Additionally, embattled property developer China Evergrande Group (HK:3333) said earlier Tuesday its contracted sales for 2021 had plunged 39% from the previous year.
Oil prices traded largely flat Tuesday ahead of a meeting of top producers to discuss future output levels amid rising Omicron cases but only limited restrictive measures in the biggest fuel-consuming countries.
The Organization of the Petroleum Exporting Countries and allies, a grouping called OPEC+, will meet virtually later in the day, with the cartel expected to stick to its plan to increase output by 400,000 barrels per day in February.
By 2:05 AM ET, U.S. crude futures traded 0.1% lower at $76.03 a barrel, while the Brent contract edged lower to $78.97. Both contracts jumped more than 1% on Monday.
European Stock Futures Higher; New Year Optimism Continues
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