European Shares Seen Up In Cautious Trade
European stocks are seen opening a tad higher on Wednesday after suffering steep losses in the previous session.
Asian markets fell across the board amid concerns around higher U.S. bond yields, the debt-ceiling impasse in Washington, China Evergrande’s debt crisis and a power crunch in the country.
In their testimonies before a Senate Banking Committee hearing, both U.S. Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen warned that a default due to a failure to raise the debt ceiling would have catastrophic consequences. The pair will also testify before a House Banking Committee hearing on Thursday.
U.S. stock futures traded higher as cash-strapped China Evergrande Group said it plans to sell a 9.99 billion yuan ($1.5 billion) stake in Shengjing Bank Co Ltd to a state-owned asset management company.
The dollar traded near its strongest levels of the year, while oil extended declines for a second day on data showing a surprise build in U.S. crude oil supplies.
A report on U.S. pending home sales along with more remarks by central bank chiefs, including the Bank of England’s Andrew Bailey, the Bank of Japan’s Haruhiko Kuroda, the European Central Bank (ECB)’s Christine Lagarde, and Powell may attract attention later in the day.
Economic confidence data from euro area and mortgage approvals figures from the U.K. are due later in the session, headlining a light day for the European economic news.
U.S. stocks tumbled overnight as a surge in Treasury yields hit mega-cap technology stocks and weak consumer confidence data stoked worries about the pace of economic growth.
The Dow lost 1.6 percent, while the S&P 500 slumped 2 percent and the tech-heavy Nasdaq Composite plunged 2.8 percent to log their sharpest pullback since May.
European stocks also closed sharply lower on Tuesday as higher bond yields, political uncertainty in Germany and weak industrial profits data from China triggered a flight from riskier assets.
The pan European Stoxx 600 gave up 2.2 percent. The German DAX dropped 2.1 percent, France’s CAC 40 index shed 2.2 percent and the U.K.’s FTSE 100 eased half a percent.
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