European Stocks Mixed Despite French Stimulus Plans

This post was originally published on this site – European stock markets are set to open mixed Thursday, helped by France launching a new stimulus plan but amid caution ahead of key services economic data.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.4% lower, CAC 40 futures in France climbed 0.4%, while the FTSE 100 futures contract in the U.K. rose 0.2%. 

The French government announced Thursday it plans to inject 100 billion euro ($118.3 billion) of stimulus over two years to soften the economic impact of the coronavirus crisis.

The plan offers up in particular 35 billion euros for making the euro zone’s second-biggest economy more competitive, 30 billion for more environmentally friendly energy technologies and 25 billion for supporting jobs, Reuters reported, ahead of the official presentation late on Thursday.

Earlier Thursday, China’s service sector activity grew for a fourth straight month in August, with the Caixin services PMI index staying above the 50-mark even while dropping to 54.0 from 54.1 in July, Companies surveyed hired more people for the first time since January.

The services sector, which accounts for about 60% of the economy, had been slower to return to growth initially than manufacturing, but its recovery has gathered pace in recent months.

The news was less good in Japan, with the third-largest economy in the world reporting an August services PMI of 45, below July’s 45.4, indicating a contracting sector.

With this in mind, investors will be paying close attention to the release of services PMI data for Europe later Thursday to see if there has been a pickup in business activity in hard-hit sectors of the service economy.

In corporate news, French consulting and IT services provider Capgemini (PA:CAPP) is likely to be in focus after it said it expected double-digit revenue growth in 2020 driven by a gradual second-half recovery.

Oil prices edged lower Thursday, continuing Wednesday’s sharp losses amid concerns about the demand for fuel given a patchy U.S. economic recovery.

Although the Energy Information Administration detailed a 9.362 million-barrel draw in crude oil supply for the week ended August 28, much bigger than expected, it also recorded a drop to 8.78 million barrels per day in U.S. gasoline demand, from 9.16 million b/d a week earlier.

U.S. private employers hiring fewer workers than expected for a second straight month in August, also fed fears that the economic recovery was lagging. 

U.S. crude futures traded 0.2% lower at $41.42 a barrel, while the international benchmark Brent contract fell 0.4% to $44.27. Both benchmark contracts saw falls of more than 2% on Wednesday, with WTI sliding to its lowest close in nearly four weeks and Brent at its lowest since Aug. 21.

Elsewhere, gold futures fell 0.3% to $1,939.40/oz, while EUR/USD traded 0.4% lower at 1.1803.

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