Investing.com | Oct 19, 2020 07:04
By Peter Nurse
Investing.com - European stock markets are seen opening higher Monday, helped by hope of a Covid-19 vaccine this year and renewed talk of a fresh U.S. stimulus package, although Chinese growth data may weigh.
Earlier Monday, China reported that its gross domestic product grew 4.9% in July-September from a year earlier, slower than the median forecast of 5.2%.
That said, separate monthly indicators still pointed to an expansion in activity in the world’s second-largest economy, with industrial output climbing 6.9% in September from a year earlier and retail sales rising 3.3% last month from a year.
“The market is a bit upset by the 4.9% YoY growth as the consensus has been 5% or more,” said analysts at ING, in a research note. “But the market should recover these losses when it has time to digest the substance of the GDP report instead of just reacting to the headlines.”
European markets have been lifted by comments from U.S. House Speaker Nancy Pelosi, who said on Sunday she was optimistic legislation on a wide-ranging coronavirus relief package could be pushed through before the election.
A deal will have to be done very quickly though, with Pelosi setting a Tuesday deadline for Congress to pass the measures.
European Central Bank President Christine Lagarde continued the theme, telling a French newspaper that Europe must distribute its 750 billion euro recovery fund for the pandemic-hit economy promptly and should debate creating a permanent fiscal tool for the bloc.
Also boosting sentiment was Friday’s news from drugmaker Pfizer (NYSE:PFE) that it could have a coronavirus vaccine ready in the United States by the end of this year.
The need for a vaccine is readily apparent, with the global total of Covid-19 cases rapidly approaching 40 million.
Europe currently accounts for over 17% of the global cases and nearly 22% of the deaths. New cases are growing at over 150,000 a day, with many countries reporting record daily increases in the number of coronavirus infections.
In corporate news, Koninklijke Philips (NYSE:PHG) will be in focus after the Dutch medical-technology group said Monday that third-quarter net profit exceeded expectations, and offered up positive guidance.
Also, French food group Danone (PA:DANO) restored its guidance for the full year, while laying out a reorganization of its structure.
Oil prices edged lower Monday on the back of the Chinese GDP news, which depressed hopes for fuel demand.
Written By: Investing.com
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