European Shares Set To Fall On Growth Worries

(RTTNews) – European stocks may succumb to selling pressure on Thursday amid concerns about global growth and escalating Sino-U.S. tensions.

The minutes of Fed’s late-July meeting revealed its members are considering tweaks to monetary policy amid considerable uncertainty surrounding the economy, coronavirus pandemic and aid from Congress.

The U.S. suspended a pact with Hong Kong on extradition and ended reciprocal tax treatment on shipping with the former British colony in an escalation of a dispute over the Chinese government’s new national security law.

Asian markets fell as stimulus hopes dwindle. China’s central bank today kept its benchmark lending rate for corporate and household loans steady, as expected, for the fourth straight month, but pumped cash into the banking system via reverse repos to maintain reasonable and ample liquidity in the banking system.

The dollar index steadied and gold rebounded on growth worries, while oil prices eased after major producers warned of a risk to the recovery in demand.

In economic releases, the ECB publishes the minutes of the governing council meeting held on July 15 and 16. Across the Atlantic, trading may be swayed by reaction to the Labor Department’s weekly jobless claims report.

U.S. stocks ended lower overnight while the dollar rose as investors reacted to the lack of inflationary comments, downbeat economic outlook and negative comments about yield curve control in minutes from the Federal Reserve’s latest policy meeting.

The minutes of the Fed’s July meeting noted that the coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world, and that economic activity as well employment remain well below their levels at the beginning of the year.

The Dow Jones Industrial Average dropped 0.3 percent, the tech-heavy Nasdaq Composite index shed 0.6 percent and the S&P 500 eased 0.4 percent.

European markets advanced on Wednesday, a day after the S&P 500 rose to a record high on strong housing data and better-than-expected retail earnings.

The pan-European Stoxx 600 gained 0.7 percent. The German DAX climbed 0.7 percent, France’s CAC 40 index gained 0.8 percent and the U.K.’s FTSE 100 added 0.6 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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