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European Stock Futures Higher; Virus Optimism Grows

Published 02/08/2021, 02:07 AM
Updated 02/08/2021, 02:08 AM
© Reuters.

By Peter Nurse 

Investing.com - European stock markets are seen posting gains at the open Monday, as optimism grows about an economic recovery as vaccination campaigns continue to make progress.  

At 2:10 AM ET (0710 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 0.6%, and the FTSE 100 futures contract in the U.K. rose 0.5%. 

Europe has been hit hard by the second wave of the Covid-19 pandemic, with the region’s GDP falling by 0.7% in the final quarter of 2020 due to lockdowns and other measures. However, most of Europe, and most of the developed world, is now reporting a falling infection rate while they ramp up their vaccination programs, prompting hopes that a degree of normalcy may be just around the corner.

"For the third week in a row, the number of new cases of Covid-19 reported globally fell last week," WHO Director General Tedros Adhanom Ghebreyesus said at a press conference last week. "There are still many countries with increasing numbers of cases, but at the global level, this is encouraging news."

It’s not all good news though as drugmaker AstraZeneca (NASDAQ:AZN) said over the weekend that its vaccine appeared to offer only limited protection against mild disease caused by the South African variant of the virus. South Africa has suspended the rollout of Astra's vaccine, while the company and Oxford University have said they will work on developing a booster shot by the autumn.

Additionally, hopes of more U.S. stimulus have risen after both the Senate and House passed a budget resolution on Friday, starting the process that would allow President Joe Biden’s $1.9 trillion rescue package to be approved.

Back in Europe, there are few major corporate earnings due Monday. On the data front, the latest German industrial production figures showed no growth in December, a hefty drop from growth of 0.9% the previous month. 

In France, a court suspended Veolia's hostile bid for water services rival Suez, while the government insisted that takeover talks must proceed on a friendly basis. U.K. ecommerce names such as ASOS (LON:ASOS) and Boohoo (LON:BOOH) may come under early pressure after weekend reports suggesting the government may overhaul the system of business rates to remove the tax advantage of online-only names.

U.K.-based Dialog Semiconductor (DE:DLGS), meanwhile, said it had accepted a takeover bid from Renesas at 67.50 euros a share, valuing it at some 4.9 billion euros.

Oil prices firmed Friday on growing hopes increased stimulus will hasten an economic revival coupled with supply curbs by primarily Saudi Arabia, but also other members of the Organization of the Petroleum Exporting Countries and its allies, including Russia.

U.S. crude futures traded 1% higher at $57.39 a barrel, after hitting $57.56, the highest since January last year.

The international benchmark Brent contract rose 0.5% to $59.86, after hitting a high of $60.05. The last time front-month Brent traded at $60 was Feb. 20, 2020.

Elsewhere, gold futures rose 0.2% to $1,816.40/oz, while EUR/USD traded 0.1% lower at 1.2033.

 

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