By Peter Nurse
Investing.com - European stock markets are seen opening in a cautious manner Friday, with continued worries about the Covid-19 surge weighing despite growth in China’s service sector as well as renewed confidence of a U.S. stimulus package.
At 2:10 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.3% lower, but CAC 40 futures in France climbed 0.2% and the FTSE 100 futures contract in the U.K. rose 0.1%.
Earlier Friday, China’s Caixin Services Purchasing Managers Index rose to 54.8 in September, against August’s reading of 54, remaining in positive territory for a fifth consecutive month, suggesting the second largest economy in the world is quickly returning to health.
“The services sector’s post-epidemic recovery showed signs of speeding up,” said Caixin Insight Group senior economist Wang Zhe. “Domestic supply and demand in the services sector continued to recover at a faster pace, while overseas demand remained subdued.”
However, this positive news wasn't replicated in Europe, as the latest economic U.K. data pointed to a slowdown in the recovery, with manufacturing production rising just 0.7% in August, versus 3.0% expected, and industrial production rising just 0.3%, against the predicted 2.5%.
Worries about the coronavirus continue to plague the European markets, particularly after the World Health Organization reported a record one-day increase in global coronavirus cases on Thursday, led by a surge of infections in Europe.
More French cities are set to close bars in the coming days as Covid-19 infections spike, a move Berlin is set to adopt as Germany’s capital has one of the worst outbreaks in the country. In the U.K., some 17,540 new cases were logged Thursday, a rise of more than 3,000 from Wednesday.
On Thursday, hopes of a coronavirus stimulus package in the U.S. had been raised, as President Donald Trump told Fox Business News that talks with Democrats have turned productive, just one day after he called them off.
Democrat House of Representatives Speaker Nancy Pelosi and Republican Treasury Secretary Steven Mnuchin are continuing efforts to reach a consensus.
In corporate news, the rapidly consolidating semiconductor sector is set to be in focus Friday after the Wall Street Journal reported that Advanced Micro Devices (NASDAQ:AMD) is in advanced talks to buy rival chip maker Xilinx (NASDAQ:XLNX).
Oil prices edged lower Friday, consolidating after a week of strong gains. This was based on the prospect of tighter supply given a strike in Norway, the world's third largest exporter of oil and gas, and the approach of Hurricane Delta in the Gulf of Mexico.
U.S. crude futures traded 0.4% lower at $41.02 a barrel, while the international benchmark Brent contract fell 0.5% to $43.14. Both contracts are on course for gains of around 10% this week.
Elsewhere, gold futures rose 0.9% to $1,911.15/oz, while EUR/USD traded 0.1% higher at 1.1773.