European Shares Seen Tad Lower Amid China COVID Worries

(RTTNews) - European stocks may open a tad lower on Wednesday as COVID-19 cases in China continued to surge despite harsh lockdowns and mass testing.

Cases hit the highest in more than five months in Beijing, with 78 new infections reported for Wednesday.

Traders were also tracking results of the U.S. mid-term elections, with the Democrats and Republicans fighting for control over the two chambers of Congress.

Republicans are expected to take control of the House and possibly the Senate.

Equity markets are riding high on the possibility of a divided government that could prevent major policy changes.

Asian markets traded mixed while the dollar remained under pressure ahead of the U.S. consumer price inflation report due on Thursday, which might suggest the path for interest rates ahead.

Economists expect a modest slowdown in the annual rate of consumer price growth, which could add to optimism about a slowdown in the pace of rate hikes.

Meanwhile, consumer prices in China were up 2.1 percent on year in October, the National Bureau of Statistics said earlier today. That was shy of expectations for an increase of 2.4 percent and down from 2.8 percent in September.

Producer prices slipped 1.3 percent on year in October, beneath expectations for a decline of 1.5 percent following the 0.9 percent increase in September.

Gold steadied near one-month high while oil prices fell for a third day after industry data pointed to rising U.S. inventories.

U.S. stocks rose for a third straight session overnight as traders awaited the outcome of the U.S. midterm elections, which could affect government spending, new taxes and regulations.

The Dow rallied 1 percent to reach over two-month highs, while the tech-heavy Nasdaq Composite rose half a percent and the S&P 500 gained 0.6 percent.

European stocks ended a lackluster session on a positive note Tuesday. The pan European Stoxx 600 advanced 0.8 percent.

The German DAX climbed 1.2 percent, France's CAC 40 index rose 0.4 percent and the U.K.'s FTSE 100 finished marginally higher.