By Peter Nurse
Investing.com - European stock markets are set to open higher Wednesday, following gains in Asia amid confidence in the ability of the Chinese economy to rebound as the coronavirus outbreak showed signs of peaking.
At 02:25 ET (0725 GMT), the DAX futures contract traded 40 points, or 0.3% higher. France's CAC 40 futures were up 18 points, or 0.3%, while the FTSE 100 futures contract in the U.K. rose 24 points, or 0.3%. Futures on the pan-eurozone index, the Euro Stoxx 50, climbed 12 points, or 0.3%.
Helping the tone were comments from an influential economist at a top government think tank Wednesday, who stated that China will be able to achieve its long-term goal of doubling gross domestic product and incomes in the decade to 2020 despite the impact from the coronavirus outbreak.
A growth rate of about 5.7% this year will be enough for achieving the goal of doubling GDP and incomes, said Cai Fang, the vice head of the Chinese Academy of Social Sciences, in an article in the People's Daily, the newspaper of the Chinese Communist Party, reported by Reuters.
This would still represent a drop from the 6.0% growth rate seen at the end of last year, but would be a considerable improvement on the dire predictions that a number of economists have recently offered up.
And this comes amid signs the outbreak may be peaking at the epicenter of the crisis. Authorities in Hubei, the province where the outbreak likely originated, said there were an additional 1,638 confirmed cases of the virus Wednesday. That is almost one-third less than the previous day's new cases, suggesting that the spread of the virus may be leveling off in this key province.
AT 02:10 AM ET (0710 GMT), the benchmark Shanghai cash index in China traded 0.9% higher, the Hang Seng in Hong Kong up 0.9% while the Nikkei in Japan had closed 0.7% firmer.
With this in mind, investors may be able to concentrate fully on the European corporate news flow.
Dutch bank ABN AMRO (AS:ABNd) missed analysts' expectations for its fourth quarter net earnings as interest income fell and impairments rose.
Heineken (AS:HEIN), the world's second-largest beer maker, said it expects operating profit this year to grow by a mid-single digit percentage after 2019 earnings came in line with expectations.
Kering (PA:PRTP) said the coronavirus health scare in China could heighten uncertainties for the luxury goods market, but the Gucci owner posted higher-than-expected sales for the fourth quarter of 2019 all the same.
Clariant (SIX:CLN) will be in focus after Chief Financial Officer Patrick Jany announced plans to leave for a new job at Maersk (CSE:MAERSKa) marking the latest management change at the Swiss speciality chemicals maker after its CEO departed last year.
The economic calendar in Europe is thinly populated Wednesday, with the only release of note being the December industrial production figure for the euro zone, at 05:00 AM ET (1000 GMT). This is expected to illustrate the extent of the manufacturing slowdown in the region.
Elsewhere, the oil market has pushed higher Wednesday, rebounding a touch after recent losses. The release of the latest OPEC monthly report, at 06:00 AM ET (1100 GMT), should provide some guidance as to the key developments impacting oil market trends in world oil demand, supply as well as the oil market balance. The U.S. government cut its forecast for world oil demand this year by 300,000 barrels a day.
AT 02:25 AM ET, U.S. crude futures traded 1.5% higher at $50.69 a barrel and the international benchmark Brent contract rose 2.0% to $55.12. Additionally, gold futures fell 0.1% to $1,569.05/oz while EUR/USD traded at 1.0904, down 0.1%.