By Peter Nurse
Investing.com - European stock markets are expected to open in muted fashion Wednesday, with investors continuing to digest the risks associated with the Omicron Covid-19 variant heading into year-end.
At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.2% lower, but CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. rose 0.3%.
European equity indexes posted strong gains Tuesday, with the DAX in Germany, the CAC 40 in Paris and the FTSE 100 in London all gaining 1.4%, after investors put aside Covid-related fears and bought stocks that had been battered over the previous few days.
Policymakers are scrambling hard to try and contain the potential damage from the new variant, stepping up vaccination programs while reimposing partial or full lockdowns or other social distancing measures.
There was some good news from the U.K., one of the countries hardest hit by the Omicron variant so far. Prime Minister Boris Johnson said he would not introduce new curbs in England before Christmas and Chancellor Rishi Sunak announced 1 billion pounds ($1.3 billion) of extra support for businesses hit hardest by the new surge.
However, it’s debatable how long the market can hold up after Hans Kluge, the World Health Organization's European head, warned on Tuesday of “another storm coming … pushing already stretched health systems further to the brink."
The main economic data release in Europe Wednesday comes from the U.K., with the latest reading of third-quarter GDP showing an increase of 6.8% on the year, slightly above expectations, but only rose 1.1% on the quarter.
In corporate news, AP Moeller Maersk (CSE:MAERSKb) is likely to be in the spotlight Wednesday after the Wall Street Journal reported that the Danish shipping giant is in advanced talks to acquire Hong Kong-based LF Logistics for about $3 billion.
The announcement for the deal could come as soon as Wednesday, assuming the talks don't break down, the report added.
Oil prices stabilized Wednesday, helped by an industry report pointing to another sharp drop in U.S. crude stockpiles but with traders reluctant to push the market too much higher given the ongoing concerns over the rapid spread of Omicron cases globally.
The American Petroleum Institute reported crude stockpiles fell by 3.67 million barrels last week, a larger draw than the 2.63-million-barrel drop expected and much larger than last week’s 815,000-barrel fall. If confirmed by government data later on Wednesday, it would be a fourth weekly draw.
By 2 AM ET, U.S. crude futures traded 0.2% higher at $71.23 a barrel, while the Brent contract was flat at $73.97.
Europe's bigger energy problem right now is with power and gas, prices for which hit new record highs across the continent again in early trading as Russia increased the political pressure on the EU to approve the start of gas flows through the Nord Stream 2 pipeline. President Vladimir Putin spoke on Tuesday of a "military-technical" response to supposed threats to the country from alleged NATO influence in Ukraine.
Additionally, gold futures fell 0.1% to $1,787.50/oz, while EUR/USD traded 0.2% lower at 1.1267.