The European markets are set to open lower on Wednesday after U.S. stocks finished largely in the red overnight ahead of the start of earnings season, with aluminum giant Alcoa due to announce its third-quarter results on Thursday.
Asian stocks are mostly higher, although gains remain capped in reaction to the IMF’s latest World Economic Outlook (WEO) report, which foresees lower global growth compared to last year. Hong Kong’s Hang Seng index is rallying 1.4 percent as casino stocks extended the previous session’s gains and investors waited for mainland Chinese markets to resume trading on Thursday after the long break for Golden Week holidays.
Japan’s Nikkei index reversed early losses and is currently up 0.8 percent after the Bank of Japan kept its monetary policy steady, as widely expected.
In economic releases, shop prices in the United Kingdom fell 1.9 percent in September from a year earlier following a 1.4 percent decline in August, the British Retail Consortium said. Prices were down 0.4 percent from the previous month as the deflation trend continued in the run-up to Christmas.
Investors await Thursday’s Bank of England (BoE) interest-rate decision and the accompanying meeting minutes for further clarity on the economic outlook and policy trajectory over the medium term.
German industrial output unexpectedly declined 1.2 percent in August from the prior month, offsetting the 1.2 percent rise in July, data from Destatis revealed. Economists had forecast the growth rate to ease to 0.2 percent.
Industrial production figures from the U.K. are slated for release in the European session later today, while the U.S. economic calendar remains virtually devoid of any important economic releases.
Crude oil prices extended overnight gains ahead of this week’s crude inventory report due to be published by the U.S. Department of Energy. Copper extended gains for a fourth day and gold held steady in light trade as diminished expectations for 2015 Fed rate hike kept the dollar under pressure.
In domestic corporate news, Airbus Group and Bombardier Inc. said that talks between the two companies over possible “business opportunities” have ended.
German metals trader KlÃ¶ckner & Co. SE said that it would not meet the guidance for the third quarter, due to further declining prices and a weak demand for steel and metal products.
Swiss foods giant NestlÃ© SA released its second Creating Shared Value report outlining the company’s accomplishments in nutrition, health and wellness, environmental sustainability and social impact in 2014, as well as its forward-looking commitments.
Rexel, a French distributor of electrical parts and supplies, trimmed its financial targets for FY15, citing the deterioration of the macro-economic environment in which the company has been operating since it announced its quarterly results on July 29.
The European markets closed firmly in positive territory on Tuesday, led by gains in miners and automakers as oil prices climbed back towards $50 per barrel and Volkswagen signaled it was preparing to slash costs. Disappointing German factory orders and U.K. house price data also fueled hopes that major central banks will maintain ultra-loose monetary policies for longer. The German DAX rose 0.9 percent, France’s CAC 40 index gained 1 percent and the U.K.’s FTSE 100 index added 0.4 percent.
U.S. stocks closed mostly lower overnight, with the S&P 500 snapping a five-day winning streak, as losses in biotechnology and health-care stocks overshadowed gains in the resource sector. Weak trade deficit data and the IMF’s revised downward forecast for global economic growth also kept investors cautious, heading into earnings season. While the Dow inched up 0.1 percent, the tech-heavy Nasdaq dropped 0.7 percent and the S&P 500 shed 0.4 percent.