Investing.com | Jul 31, 2020 07:02
By Peter Nurse
Investing.com - European stock markets are seen opening mixed Friday, helped by signs of economic recovery in Asia but with weak French growth data and rising global Covid cases still weighing.
Earlier Friday, China's official Purchasing Managers' Index data showed that factory activity grew in the second largest economy in the world in July for a fifth straight month and at a faster pace, while Japan's industrial output snapped four months of decline in June.
French GDP followed the theme Friday, dropping by 13.8% in the second quarter, preparing the path for the official EU release later in the session.
“We know second-quarter GDP growth …. will be horrible,” said analyst Peter Vanden Houte at ING, in a research note. “The 10.1% drop in 2Q German GDP already sets the tone. But that is old news. The markets are now focusing on indicators that can give a flavor of the strength of the recovery now that all countries have come out of lockdown.”
That said, the Covid-19 pandemic shows few signs of slowing down, with global cases approaching 17,300,000, according to Johns Hopkins data, and deaths well over 670,000. A number of countries around the world, including some in Europe, have seen rising numbers of new coronavirus infections, suggesting the lifting of lockdown measures has bred a second wave.
The earnings season continued at a pace in Europe Friday.
BNP Paribas (PA:BNPP) set aside 1.45 billion euros ($1.72 billion) in the second quarter to cover credit losses, but the French bank’s net profit fell just 6.8% to EUR2.30 billion.
Elsewhere, Swiss Re (SIX:SRENH) posted a net loss of $1.14 billion, hit by coronavirus-related claims, but the Swiss reinsurer expressed confidence about the rest of 2020.
EssilorLuxottica (PA:ESLX) reported a loss of 412 million euros, and the Franco-Italian eyewear manufacturer was unable to provide guidance for the rest of the year.
Oil prices edged higher, recovering from three-week lows hit on Thursday in reaction to the U.S. GDP and jobless claims numbers.
The Organisation of Petroleum Exporting Countries will soon become the focus after the group decided earlier this month to dial back production cuts, a move that will see an increase in production of about 2 million barrels a day starting in August.
Written By: Investing.com
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