European Shares Poised For Firm Start As Rate Worries Ease

(RTTNews) - European stocks are seen opening on a positive note Friday as worries surrounding aggressive Fed tightening eased.

Christopher Waller and St. Louis Fed President James Bullard, two of the Federal Reserve's most hawkish policymakers, on Thursday signaled support for a second straight 75-basis-point rate hike at the U.S. central bank's policy meeting later this month, alleviating some fears of a 100-basis point hike.

Asian markets traded mixed and U.S. equity futures rose amid easing uncertainty over the scale of the U.S. rate hike.

Chinese data released earlier in the day proved to be a mixed bag, with GDP contracting 2.6 percent in the three months ending in June compared with the previous quarter, while retail sales improved in June following the easing of COVID-19 restrictions.

Hong Kong's Hang Seng was down around 1.7 percent as Alibaba shares tumbled after reports that the tech giant's executives had been called in for meetings with Chinese officials over the theft of a vast police database.

The dollar paused for breath while oil prices rose about 1 percent in Asian trade. Gold hovered around $1,700 per ounce after reaching a one-year low overnight.

Trading later in the day may be impacted by reaction to a slew of U.S. economic data, including reports on retail sales, industrial production and consumer sentiment as well earnings news from big-name companies like Citigroup, Wells Fargo and UnitedHealth.

U.S. stocks climbed well off their worst levels of the day on Thursday but still ended broadly lower, reflecting disappointing earnings news from financial giants JPMorgan Chase and Morgan Stanley.

A key measure of U.S. wholesale and business prices increased more than expected in June and new claims for unemployed benefits hit an eight-month high last week, adding to fears of a possible recession.

The Dow ended half a percent lower and the S&P 500 edged down 0.3 percent while the tech-heavy Nasdaq Composite finished on a flat note.

European stocks fell sharply on Thursday as the EU slashed its growth forecasts and predicted that inflation will be even steeper than feared.

The pan European Stoxx 600 fell 1.5 percent. The German DAX tumbled 1.9 percent, France's CAC 40 index gave up 1.4 percent and the U.K.'s FTSE 100 shed 1.6 percent.