European stocks are expected to open higher on Tuesday, rebounding on increased investor nerves against a Chinese real estate developer and ahead of a two-day US Federal Reserve meeting.
The London FTSE would open 42 more points to 6,949, the German DAX 75 more points to 15,209, the French CAC 40 19 points to 6,464 and the Italian FTSE MIB 122 points more to 24,814, according to IG.
The rebound in European equities comes after markets got off to a bad start to the week, closing lower on Monday amid investor fears over ailing property developer China Evergrande Group and concerns about the risk of contagion to the Chinese economy and the wider world economy.
Read more: The global economy could feel the effects of the Evergrande crisis in China. Here’s what investors need to know
Hong Kong stocks fell sharply in the Asian trading session on Monday, with the benchmark Hang Seng dipping 4% as the developer teetered on the brink of default. China Evergrande Group shares fell 10.24% in the Asian trading session, after falling as much as 17% earlier.
Asia-Pacific stocks were lower in trading on Tuesday, with mainland China and South Korea markets closed for a holiday on Tuesday.
European markets were also rocked by sharp declines in the United States on Monday, where stocks started the week deep in the red as investors continued to flock to the sidelines in September amid fears over China, the Fed and Covid, with the pandemic set to become the most deadly epidemic in recent American history.
On Tuesday, the start of the much-anticipated US Federal Reserve meeting in September is high on the investor agenda. Fed Chairman Jerome Powell will hold a press conference on Wednesday following the two-day meeting with investors looking for indications of the Fed’s cut to its accommodative monetary policy.
Powell said the reduction could happen this year, but investors are waiting for more details, especially after the release of mixed economic data since Powell’s last comments.
There are no major European profits, but the Universal Music Group IPO is one to watch on Tuesday. There is no publication of important data in the region.