European stocks look set to open lower on Friday after the Dow and the S&P 500 suffered their worst single-day losses in about six weeks overnight, hit by a sell-off in the technology sector.
The major U.S. averages fell between 0.8 percent and 1.4 percent on Thursday despite healthcare and financial stocks gaining ground on the back of optimism for repeal and replacement of Obamacare and the Fed’s stress-test results.
Asian markets are also broadly lower, with benchmark indexes in Australia and Japan falling over 1 percent each, despite encouraging U.S. GDP and Chinese manufacturing data.
Official data showed on Thursday that the U.S. economy slowed less sharply in the first quarter than initially estimated.
China’s official manufacturing PMI for June rose to 51.7 from 51.2 in May, beating forecasts and adding to evidence that the world’s second-largest economy maintained its momentum in the second quarter.
Data out of Japan painted a mixed picture of the economy. While consumer price inflation rose for the fifth straight month in May, consumer spending remained tepid, the jobless rate ticked higher and industrial output slipped back into contraction, adding to underlying risks.
The dollar extended losses and gold held steady amid falling equities while crude oil prices remain on track for their biggest weekly gain since mid-May. The British pound traded above $1.30 after Prime Minister Theresa May won confidence vote in parliament.
The economic calendar is heavy today, with inflation figures from the euro area, unemployment and retail sales data from Germany and French data on consumer prices and spending slated for release later in the day.
Across the Atlantic, traders are likely to keep an eye on reports on personal income and spending, consumer sentiment and Chicago-area business activity for more clues on the health of the economy.
Earlier in the day, a survey published by market research firm GfK showed that consumer confidence in the United Kingdom tumbled in June with an index score of -10, the lowest in 11 months and down from -5 in the previous month.
European markets fell the most in nine months on Thursday as the euro hit a 13-month high and the pound rose to one-month high on the back of hawkish commentary from central banks.
The pan-European Stoxx Europe 600 index lost 1.3 percent. The German DAX tumbled 1.8 percent, France’s CAC 40 index slumped 1.9 percent and the U.K.’s FTSE 100 dropped half a percent.
by RTT Staff Writer