European stocks mixed; OECD report to detail economic weakness

  • Stock Market News
European stocks mixed; OECD report to detail economic weakness
Credit: © Reuters.

By Peter Nurse - European stock markets were mixed in muted trade Tuesday, as investors warily assessed the likely impact on global growth from the surge in COVID cases in China, the world's second-largest economy.

At 03:40 ET (08:40 GMT), the DAX index in Germany traded 0.1% lower, CAC 40 in France fell 0.2%, while the FTSE 100 in the U.K. rose 0.6%.

China is struggling with a new outbreak of COVID cases in a number of cities, which resulted in its first COVID-related death in almost six months over the weekend.

This has sparked concerns that the country could see a return of widespread mobility restrictions, weighing on economic activity in the region’s main growth driver and a major export market for Europe’s companies.

At the same time, the European Central Bank has been aggressively raising interest rates to combat inflation at record levels, weighing on economic expansion in the region.

The latest consumer confidence figures for the Eurozone are due later in the session, and are expected to show a small improvement in November from October, while the Organisation for Economic Cooperation and Development will publish its latest economic outlook later Tuesday.

The Paris-based policy forum was especially pessimistic about the outlook in Europe in September, and it’s difficult to see how the situation could have improved in the intervening period.

The U.K. reported smaller than expected public sector net borrowing for October, a welcome surprise after Chancellor Jeremy Hunt last week announced tax hikes and spending cuts to fix the country's balance sheet.

In corporate news, Novo Nordisk (CSE: NOVOb ) stock rose 0.4% after the Danish drug maker announced plans to expand its existing facilities in Bagsværd, Denmark, with the project expected to be finalized in 2024 and create about 160 new jobs.

Enel (BIT: ENEI ) stock rose 1.3% after the Italian utility outlined plans for asset sales worth €21 billion (€1=$1.0265) to reduce net debt and focus its presence in six core countries.

AO World (LON: AO ) stock soared over 15% after the online electronics retailer said its turnaround is on track and expects underlying earnings to be at the top of its guidance range for the current fiscal year, despite a wider loss in the first half.

Oil prices rose Tuesday, rebounding after hefty falls on demand worries as China’s COVID cases rise and global recession concerns grow.

Helping the tone was the denial by Saudi Arabian energy minister Prince Abdulaziz bin Salman, the de facto leader of OPEC+, that the group would be discussing a potential oil output increase at its December meeting.

This followed a report in the Wall Street Journal that stated the group would consider an increase of up to 500,000 barrels per day next month.

By 03:40 ET, U.S. crude futures traded 0.9% higher at $80.72 a barrel, while the Brent contract rose 1% to $88.33.

Additionally, gold futures rose 0.3% to $1,745.35/oz, while EUR/USD traded 0.3% higher at 1.0269.

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