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Investing.com – European stock markets are seen opening largely lower Tuesday, handing back some of Monday’s outsized gains, as investors become more cautious after the early euphoria over the initial trial results of the Pfizer/BioNTech coronavirus vaccine.
At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.3% higher, while CAC 40 futures in France dropped 0.6% and the FTSE 100 futures contract in the U.K. fell 0.7%.
On Monday, the DAX rose nearly 5%, the CAC 40 jumped 7.6% and the FTSE 100 climbed 4.7% after the drugmakers said their vaccine was more than 90 percent effective at preventing Covid-19.
The gains on Wall Street were equally strong initially, with the exception of the Nasdaq Composite, which is filled with stocks that have benefitted from the stay-at-home trade. However, late selling ate into the gains of the other main U.S. indices, amid caution over the time scale and the scope of the production of the vaccine. This has translated into losses in Europe Tuesday.
As welcome as the news of the vaccine is, it doesn’t change “the near-term fact that the global economy faces a challenging winter,” said ING analysts, in a research note.
“Renewed lockdowns across the eurozone are likely to shave roughly 2% off GDP in the fourth quarter, according to our latest forecasts, while the risk of further restrictions in the U.S. will put a considerable brake on activity.”
Many European countries continue to be hit hard by the virus, while in the U.S. there were just over 59,000 Covid-19 patients in hospitals across the United States on Monday, the country’s highest number ever of in-patients being treated for the disease, according to Reuters data.
In corporate news, Adidas (DE:ADSGN) offered upbeat guidance for the year end despite the pandemic’s resurgence.
On the flip side, Norwegian Air Shuttle (OL:NORR) said it could run out of cash in the first quarter of 2021 unless it secures fresh funding, the pandemic-hit budget carrier said while reporting third-quarter results on Tuesday.
The economic news remains challenging, with the U.K. unemployment rate rising and the important German ZEW economic sentiment index expected to show a sharp decline in November.
Oil prices steadied Tuesday, after Monday’s sharp gains on the back of the vaccine news. With the number of coronavirus cases continuing to rise in Europe and parts of the U.S., and some lockdown measures in place, the short term picture for crude demand remains challenging.
U.S. crude futures traded 0.3% lower at $40.19 a barrel, after jumping 8.5% the previous session, while the international benchmark Brent contract was flat at $42.40, after climbing 7.5% higher.
Elsewhere, gold futures rose 1.6% to $1,884.45/oz, after falling more than 5% Monday as investors rushed into riskier instruments, like stocks, while EUR/USD traded 0.1% higher at 1.1829.
