LONDON — European stocks are expected to open higher on Wednesday, following a positive trend on Wall Street on Tuesday and in Asia Pacific markets overnight.
London’s FTSE is seen opening 25 points higher at 6,545, Germany’s DAX up 27 points at 13,400, France’s CAC 40 16 points higher at 5,554 and Italy’s FTSE MIB 94 points higher at 22,014, according to IG.
The positive trend set for European markets comes after gains on Wall Street Tuesday, bucking a negative trend in recent sessions. The Dow Jones Industrial Average climbed nearly 340 points, helped by a 5% jump in Apple’s stock, while the S&P 500 climbed 1.3%, snapping a four-day losing streak.
Stocks in Asia-Pacific were higher in Wednesday trade following an overnight bounce on Wall Street as optimism grew over the prospect of more stimulus in the wake of the Covid-19 pandemic.
House Speaker Nancy Pelosi invited congressional leaders, including Senate Majority Leader Mitch McConnell, to discuss government funding and the relief package on Tuesday. McConnell later told reporters as he was leaving the Capitol that “significant progress” was being made, according to NBC News.
U.S. stock futures were flat in early morning trading on Wednesday as investors clung to the possibility of new fiscal stimulus before the end of the year. Investors stateside will also be looking out for the Federal Reserve’s comments on Wednesday about the future of the U.S. economy.
While the Fed’s long-term view is expected to be improved due to the vaccine, the central bank is expected to sound very dovish at the end of its meeting.
In Europe, the surge in coronavirus cases is the main focus for investors with several major economies, including Germany, Italy and the Netherlands, changing Christmas plans to relax restrictions in order to curb a sharp rise in cases.
On Wednesday, Germany is starting its Christmas lockdown in which schools and nonessential shops must close. The U.K. too is reconsidering plans to relax rules to allow families to gather over the festive period after high-profile criticism of the move.
The main data release investors in Europe will be looking out for Wednesday is flash purchasing manager’s index (PMI) data from the euro zone for December. The data will give a good indication of the damage the second round of lockdowns has done to the region’s manufacturing and services sectors.
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