By Peter Nurse
Investing.com - European stock markets pushed higher Tuesday, lifted by signs of an economic stabilization in Asia. The gains remain tentative, however, as the coronavirus remains a serious threat in the region.
China's official Purchasing Managers' Index rose to 52 in March, above the 50-point mark that separates monthly growth from contraction, rebounding from a plunge to a record low of 35.7 in February .
Welcome as this is, economists are still forecasting a steep contraction in China's first-quarter gross domestic product, the first such contraction in three decades.
At 03:35 ET (0735 GMT), the U.K.'s FTSE index traded 2.5% higher, France's CAC 40 was up 1.8%, while the DAX rose 2.3%. The broader based Stoxx 600 Europe index climbed 2%.
Italy, the epicenter of the outbreak in Europe, announced Monday that it would be extending its nationwide coronavirus lockdown measures until at least Easter. Overall numbers of new infections continue to rise daily, although the rate of increase appears to have plateaued in recent days, as has the mortality rate..
Italy has been shut down for three weeks now, and its restrictions were set to be lifted on Friday. It has become the world’s hardest hit country in terms of number of deaths - with more than 11,500 passing away - around a third of all global fatalities.
The situation in Spain is almost as bad, while France has reported its highest coronavirus death toll in 24 hours, with 418 deaths on Tuesday to take the country’s total to 3,024.
The data barrage continues in Europe Tuesday, with March inflation data for the region expected at 5 AM ET (0900 GMT). However, of the most interest is likely to be the German March unemployment data at 3:55 AM ET, given the economic slowdown in place to combat the virus outbreak.
In corporate news, shares in WPP (LON:WPP) climbed over 5% despite saying it was pulling its dividend and share buyback and withdrawing its guidance for 2020, citing the coronavirus outbreak. The ad giant also launched a cost cutting drive, identifying up to 800 million pounds that can be saved in 2020.
Shares in Ericsson (BS:ERICAs) climbed 3% after the Swedish telecom equipment maker’s CEO Borje Ekholm said Tuesday that the company had seen no material impact on its business from the global coronavirus outbreak.
Shares in JC Decaux (PA:JCDX) rose over 6% after the French advertising group confirmed that it is planning to buy a 23% minority stake in the Hong Kong-listed outdoor advertising company Clear Media.
Oil markets rebounded after recent sharp losses Tuesday, but the outlook remained grim as the pandemic continued to hurt demand while the market was still oversupplied as a price war between Saudi Arabia and Russia remained unresolved.
At 3:45 AM ET, U.S. crude futures traded 5.3% higher at $21.16 a barrel. The international benchmark Brent contract rose 1.9% to $26.92.
Elsewhere, gold futures fell 0.3% to $1,637.75/oz, while EUR/USD traded at 1.1003, down 0.4% on the day.