By Peter Nurse
Investing.com – European stock markets are set to push higher at the open Thursday, after China cut tariffs on some goods imported from the U.S. Investors will look to the ongoing earnings season for confirmation of this better tone.
At 02:15 ET (0715 GMT), the contract traded 61 points, or 0.5% higher. France’s were up 40 points, or 0.7%, while the contract in the U.K. rose 24 points, or 0.3%. Futures on the pan-eurozone index, the , climbed 18 points, or 0.5%.
China said early Thursday it will halve tariffs on $75 billion of U.S. imports from February 14, a month after Beijing and Washington signed a truce in their long-running trade war. This should help improve negotiating conditions for a ‘phase 2’ deal – although that is widely seen as too complex to negotiate this year.
The tariff reductions come as China struggles to mitigate the economic damage caused by a novel coronavirus outbreak, which has so far claimed more than 560 lives.
Asian stocks gained on the news, with the index in China closing up 1.7%, Japan’s up 2.4% and the in Hong Kong gaining 2.3%.
With this wind in their sails, investors will take a close look at the latest European corporate earnings.
Nokia (HE:) reported on Thursday a surprising rise in October-December underlying profits, driven by cost cuts. The Finnish telecom network equipment maker had taken a hefty hit in October after cutting its outlook and halting dividend payouts, citing the need to step up investments in 5G.
ArcelorMittal (AS:), the world’s largest steelmaker, voiced optimism over the outlook for steel demand this year despite the impact from the coronavirus outbreak in China. It expects global steel demand to grow by 1% to 2% this year after expanding 1.1% in 2019.
Sweden’s Volvo Car Group reported an 18% rise in fourth-quarter operating profit as cost cuts and growing sales more than offset the impact of subdued global auto markets.
French drugmaker Sanofi (PA:) said net income was up more than 18% in the fourth quarter of last year on the back of double-digit growth sales at its specialty care business Genzyme and its vaccines unit.
Overnight, on Wall Street, the gained 1.1% to a record close of 3,334.69 while the added 0.4% to 9,508.68, also a record high. These indexes were helped by ADP’s employment report which showed private payrolls jumped by 291,000 in January, the most since May 2015. This comes ahead of Friday’s key official U.S. employment release, which is forecast to show a jump of 160,000 nonfarm jobs.
Turning back to Europe, European Central Bank President Christine Lagarde is scheduled to speak at 03:00 AM ET (0800 GMT), before the central bank publishes its new economic forecasts at 05:00 AM ET (1000 GMT). The latest disappointing , which fell 2.1% in December, will provide food for thought.
Elsewhere, the oil market has pushed higher Thursday, as talks between experts from the OPEC coalition have been extended into a third day amid reports the group will agree to further cuts in production. That comes among growing signs of demand destruction in the Chinese energy complex. CNOOC, the country’s biggest gas buyer, has declared force majeure to get out of taking delivery of contracted volumes of liquefied , Reuters and Bloomberg reported, citing unnamed sources. Additionally, reports suggest China intends to cut its purchases of Saudi oil.
AT 02:20 AM ET (0720 GMT), futures traded 2.1% higher at $51.83 and the international benchmark contract rose 1.7% to $56.20.