By Peter Nurse
Investing.com - European stock markets are seen opening sharply lower Monday, as surging coronavirus cases prompted more restrictive measures in the region while the U.S. remains unabe to provide fresh catalysts as election day looms ever nearer.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 1.7% lower, CAC 40 futures in France dropped 1% and the FTSE 100 futures contract in the U.K. fell 0.8%.
Europe continues to be hit hard by the second wave of the Covid-19 virus. France reported record new infections for the fourth consecutive day on Sunday. Italy also reported a jump in infections, and has introduced the strongest virus restrictions since the end of a national lockdown in May, while Spain is set to impose a national curfew, having declared a national state of emergency at the weekend.
The news in the U.S. doesn’t make for good reading either. The country recorded the most infections of the pandemic for the second day in a row, adding another 85,317 cases, including aides of Vice President Mike Pence. Pence himself continues to attend election campaign rallies, while White House chief of staff Mark Meadows told CNN that "we aren't going to contol the pandemic."
“This is a dangerous moment for many countries in the northern hemisphere as cases spike,” World Health Organization Director General Tedros Adhanom Ghebreyesus said, in an online meeting of the Berlin-based World Health Summit. “We still have a long haul ahead of us.”
Investors will keep a wary eye on the release of the German Ifo business climate indicator for October later in the session to see whether these rising Covid-19 numbers are having an impact on confidence in the country’s corporate sector.
In corporate news, Siemens (DE:SIEGn) is likely to be in the spotlight after Bloomberg reported that U.S. private equity firm Carlyle Group (NASDAQ:CG) is nearing an agreement to buy the German industrial giant’s mechanical drive arm Flender, for about 2 billion euros ($2.37 billion).
SAP (DE:SAPG) released Sunday third-quarter results showing a 4% decline in adjusted total revenue, while operating profit fell 12%. The German software giant also cut its guidance for the year and abandoned its forecast that profitability would expand steadily over the medium term, saying coronavirus lockdowns would hit demand well into 2021.
Concerns about the virus also hit oil prices: U.S. crude futures traded 2.6% lower at $38.81 a barrel, while the international benchmark Brent contract fell 2.3% to $41.10. Brent fell 2.7% last week and WTI dropped 2.5%, their first weekly losses in three.
Oil traders will also be keeping an eye on the progress of tropical storm Zeta, which is poised to turn into a hurricane and disrupt oil production in the Gulf of Mexico.
Elsewhere, gold futures fell 0.3% to $1,898.65/oz, while EUR/USD traded 0.3% lower at 1.1830.