Monday, January 30, 2023
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European stock futures rise; U.K. growth contracts in third quarter By

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By Peter Nurse – European stock markets are expected to open higher Friday, adding to the previous session’s U.S. inflation-inspired strong gains, even as growth data pointed to the U.K. entering a recession.

At 02:00 ET (07:00 GMT), the contract in Germany traded 0.2% higher, in France climbed 0.7% and the contract in the U.K. rose 0.8%.

The main European indices closed sharply higher on Thursday, with the leading the way with gains of 3.5%, following their peers on Wall Street after the in the U.S. fell by more than expected in October, bolstering hopes of an early end to the current cycle of interest rate increases by the .

This positive tone is expected to continue Friday, helped by reports from China’s state media that the quarantine time for international travelers had been reduced by two days to five, raising hopes of a greater relaxation of the country’s strict COVID mobility restrictions.

COVID outbreaks in a number of Chinese cities throughout the year, including the financial hub of Shanghai and Guangzhou, a key manufacturing center, have limited economic activity in the world’s second largest economy and a major European export market.

Back in Europe, the U.K. released its latest preliminary growth data, showing that the economy contracted on the month in September, also falling in the third quarter.

The warned at last week’s policy meeting that Britain has already entered a recession that could potentially last two years – longer than during the 2008-09 financial crisis.

Political uncertainty continued in the U.S., with the battles in the states of Arizona and Nevada holding the key to control of the U.S. Senate, three days after Americans cast their final ballots in midterm elections.

Turning to the corporate sector, Richemont (SIX:) reported a hefty first-half net loss after the luxury group took a substantial charge related to its part exit from online fashion retailer YOOX Net-A-Porter.

Daimler Truck (ETR:) reported a 27% jump in third-quarter unit sales as the chip shortage that hit the heavy truck business particularly hard a year earlier began to ease.

Oil prices rose Friday, extending the previous session’s gains after the milder-than-expected U.S. inflation release raised hopes of a soft landing for the U.S. economy, the world’s largest.

Also boosting the tone were raised hopes of a relaxation of China’s Zero-COVID policy, even as the oil market looks set for a weekly loss as the surge in cases in the world’s largest importer of crude weighed on the demand outlook.

By 02:00 ET, futures traded 2.3% higher at $88.47 a barrel, while the contract rose 2.3% to $95.77. Both benchmarks posted gains of approximately 1% on Thursday, but are heading for losses of over 3% for the week.

Additionally, rose 0.4% to $1,761.10/oz, while traded 0.1% higher at 1.0217.

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