By Peter Nurse
Investing.com - European stock markets traded higher Monday helped by bargain hunting after last week’s sharp selloff, but confidence remains brittle with European manufacturing surveys pointing to a slowing global economic recovery in the face of the new Covid outbreak.
At 3:45 AM ET (0745 GMT), the DAX in Germany traded 0.1% higher, the CAC 40 in France rose 0.6% and the U.K.’s FTSE 100 climbed 0.3%.
The week opened with a rebound after markets recorded their sharpest decline since February last week, amid concerns that the measures taken to stop the spread of the delta variant of the Covid-19 virus will hit global growth just as the U.S. Federal Reserve considers starting the withdrawal of its extraordinary monetary stimulus.
Helping the tone at the start of the week was the news that China, one of the globe’s main economic drivers, reported no new locally acquired Covid-19 cases for the first time since July.
That said, sentiment remains frail with business activity in Germany’s important manufacturing sector, as well as France’s dominant services sector, slowing in August compared with July, according to flash PMI survey data.
Earlier Monday, Japan's factory activity growth slowed in August, while that of the services sector shrank at the fastest pace since May last year, also highlighting the impact of the recent wave of Covid-19 infections on the world's third-largest economy.
The U.S. Federal Reserve’s Jackson Hole symposium that opens on Aug. 26 will cast a long shadow over this week, with Federal Reserve Chairman Jerome Powell expected by many to signal a start to reducing bond purchases from their current level of $120 billion a month before the end of the year.
In corporate news, J Sainsbury (LON:SBRY) stock rose over 8% following a report private equity firms were looking at the U.K. supermarket chain with a view to a potential bid. Rival WM Morrison (LON:MRW) is already the subject of competing offers from a couple of private equity firms.
BioNTech (DE:22UAy) stock rose over 5% amid expectations the U.S. Food and Drug Administration will give full approval to the Covid-19 vaccine it has developed with partner Pfizer (NYSE:PFE).
Elsewhere, oil prices traded higher Monday, rebounding from three-month lows amid some bargain hunting, but sentiment likely remains bearish with growing concerns over slower fuel demand worldwide.
By 3:45 AM ET, U.S. crude futures traded 2% higher at $63.38 a barrel, while the Brent contract rose 2% to $66.04. Both contracts had been on a seven-day losing streak and had hit their lowest levels since May 21 earlier in the session.
Additionally, gold futures rose 0.2% to $1,787.80/oz, while EUR/USD traded 0.1% higher at 1.1710.