LONDON – European stocks will open slightly higher on Tuesday, trying to recover from a brutal sell-off in the previous session as investor sentiment was shaken by a new strain of coronavirus in the UK
The UK FTSE 100 is set to open just above the 6,420 flat line, the German DAX is expected to rise by 70 points to 13,320, and the French CAC to increase by 30 points to 5,422, according to IG index data .
The gains are likely to be limited by ongoing concerns about a rapid-spread Covid mutation that was first identified in the UK. The new option forced the British government to close London and other parts of the south-east of England and give back to the mix of households over the Christmas holidays.
The variant, which scientists say is up to 70% more transmissible than previous strains in the UK, has also been identified in Italy, the Netherlands, Belgium, Denmark and Australia. It has caused several countries around the world to close their borders with the UK, disrupting travel and raising concerns about potential food shortages as the transition period for Brexit approaches.
Meanwhile, the UK and the EU remain stuck in post-Brexit trade relations as the December 31 deadline approaches, with disputes over issues such as fisheries affecting talks. British Prime Minister Boris Johnson said on Monday that the country could continue to collapse without an agreement.
“The position is unchanged, there are problems,” British Prime Minister Boris Johnson told reporters on Monday. “It is vital that everyone understands that the UK needs to be able to control its own laws in full and also that we need to be able to control our own fishing activities.”
“The fact remains that WTO terms would be more than satisfactory for the UK and we can certainly face any difficulties that stand in our way.”
Sterling extended Monday’s losses by 0.5% to about $ 1.34.
In Asia, stocks have fallen amid nervousness over the new coronavirus strain. The largest MSCI index of Asia-Pacific equities outside Japan fell 0.43%.
On Wall Street, futures were mixed following a volatile session that saw the Dow Jones industrial average erase a 400-point deficit.
The deactivated measure came as Congress on Monday evening adopted a package of aid for coronavirus and government spending. The bill now goes to President Donald Trump’s office.
In terms of data, the UK’s third-quarter GDP figure and German consumer sentiment are due at 7am London time.