By Peter Nurse
Investing.com – European stock markets are set to open higher Wednesday, helped by a stronger tone out of Asia, as traders took a calmer approach to news of the emergence of a new virus in China – one which has now reached the U.S. and several other countries.
At 02:10 ET (0710 GMT), the contract traded 84 points, or 0.6% higher. France’s were up 38 points, or 0.6%, while the contract in the U.K. rose 32 points, or 0.4%. Futures on the pan-eurozone , climbed 20 points, or 0.5%.
Earlier Wednesday, China’s public health officials confirmed more than 400 cases of coronavirus, with the death toll rising to nine, while the U.S. Centers for Disease Control and Prevention announced the first case of the illness in the United States. Additionally, authorities in Beijing said the country would start a nationwide screening effort to tackle the outbreak.
Hong Kong’s climbed 1.2% after closing down almost 3% yesterday, Japan’s advanced 0.6% and Shanghai blue chips 0.3%.
This new virus brings back memories, for those old enough, of the SARS pandemic in 2002. On that occasion more than 8,000 people across 37 countries were affected, with close to 800 deaths.
“What scared people about SARS is the mortality rate,” said Robert Carnell, Chief Economist Head of Research Asia-Pacific at ING, in a research note. But, “put into context, your chances of contracting and dying of SARS, were statistically far less than of dying of regular flu. But the response of the population of countries where there was a perceived greater risk, was huge. Presumably, the reasoning was, if I do get it, the odds aren’t great.”
On Tuesday, the fell 151.25 points, or 0.5%, to 29,196.85, the lost 8.75 points, or 0.3%, to 3,320.87 and the dropped 18.14 points, or 0.2%, to 9,370.81, as traders caught up with the news following the public holiday on Monday.
The World Economic Forum continues in Davos, Switzerland, Wednesday, although there will likely be less focus on the event after the star turn, U.S. President Donald Trump, spoke Tuesday.
In corporate news, car manufacturers are set to be in focus after overnight news from Japan that Toyota (T:) will recall 3.4 million vehicles worldwide for a defect that could impact air bags and seat belts. Additionally, South Korea’s Hyundai (OTC:) reported a better than expected quarterly operating profit, helped by brisk sales of sport-utility vehicles such as its Tucson and Palisade models.
Economic releases are limited in number Wednesday, with Italian industrial new orders and sales at 4:00 AM ET (0900 GMT). In the U.K., and the are due at 4:30 AM ET (0930 GMT) and the survey is due at 6:00 AM ET (1100 GMT).
Elsewhere, the price of oil has retreated after the IEA forecast a market surplus in the first half of the year, despite the prospect of a near-total shutdown of production in OPEC member Libya.
“I see an abundance of energy supply in terms of oil and gas,” head of the IEA, Fatih Birol, told the Reuters Global Markets Forum, while he was attending World Economic Forum meeting in Davos, Switzerland.
At 2:15 AM ET (07:15 GMT), futures traded 0,5% lower at $58.09 and the international benchmark contract fell 0.4% to $64.33. for February delivery on New York’s COMEX was 0.3% lower at $1,552.55.