European Stock Futures Higher; Covid Recovery Doubts Remain By Investing.com

By Peter Nurse 

Investing.com – European stock markets are seen opening higher Friday, helped by late gains on Wall Street overnight, although the positive tone will be tempered by ongoing concerns over rising Covid-19 cases and the region’s slow vaccine rollout.

At 3:10 AM ET (0710 GMT), the contract in Germany traded 0.1% higher, in France climbed 0.7% and the contract in the U.K. rose 0.8%.

U.S. stocks rose in a late-day rally on Thursday, with the closing up 0.6%, snapping a two-day losing streak, the rose 0.6% and the ended up 0.1%, but had been down more than 1% intraday.

Asia largely followed this positive lead, and European equity markets look set to end the week pointing higher.

However, the region’s third wave of Covid-19 cases still shows few signs of easing: while Italy and Czechia have flattened their infection curves, cases continue to rise in Germany, the Benelux, Austria and, most alarmingly, France. Poland also registered a new record high for cases on Thursday. 

A virtual meeting between EU leaders to discuss the issue continues later Friday, having started on Thursday in a fraught fashion after French President Emmanuel Macron expressed frustration over vaccine rollouts that are far behind those of Britain and the United States. 

The EU has already unveiled plans to tighten oversight of vaccine exports that would allow greater scope to block shipments to countries with higher inoculation rates.

Another reason for concern is the rising tension between the West and China, after the EU joined the U.S. and a number of Western countries this week in imposing sanctions on officials in China’s Xinjiang region over allegations of human rights abuses.

Beijing has targeted a number of Western companies in retaliation. Burberry (LON:) became the first luxury brand assailed by the Chinese backlash earlier Friday, with its well known tartan design removed from a popular video game.

U.K. fell by 3.7% on the year in February, slightly improvement from the 5.9% drop the previous month, but still indicative of a difficult situation with a lot of the country locked down.

Oil prices rebounded Friday amid worries that it may take to free the container ship stuck in the Suez Canal, blocking supply through the key waterway for a prolonged period of time.

“The Suez Canal is a vital point for global trade, including energy markets. Around 10% of global seaborne oil trade passes through the canal, whilst around 8% of global LNG trade also uses the canal,” said analysts at ING, in a research note.

futures traded 1.9% higher at $59.67 a barrel, while the contract rose 1.7% to $62.98. However, both benchmarks are on course for a weekly loss of about 3%, with the fresh coronavirus lockdowns in Europe hitting the outlook for demand.

Elsewhere, rose 0.1% to $1,725.50/oz, while traded 0.1% higher at 1.1776.