European Shares Seen Tad Higher As China GDP Beats Expectations

(RTTNews) - European stocks may open flat to slightly higher on Wednesday as investors ponder over risks stemming from the Israel-Hamas conflict and react to improved China data. Ahead of U.S. President Joe Biden's Middle East trip, Hamas and Israel traded accusations regarding the deadly blast at a hospital in Gaza City that killed 500 people and invited widespread international condemnation.

On the 12th day of the war, Israeli Prime Minister appeared to be blaming the "evil axis of Hamas, Hezbollah and Iran" for the October 7 attacks on his country.

Most Asian markets reversed early losses after China's GDP growth for the third quarter beat estimates.

China's economic growth slowed to 4.9 percent year-on-year in the July-September period, down from 6.3 percent in the previous quarter but better than forecasts for 4.4 percent growth.

The readings on retail sales and industrial output for September also surprised on the upside, suggesting that Beijing's stimulus measures to prop up banking and property sectors are gaining traction.

The yen jumped briefly before after the Bank of Japan announced an unscheduled bond purchase operation.

The dollar index remained on the back foot despite a surge in U.S. Treasury yields on concerns the Federal Reserve will keep interest rates higher for longer and might even announce a hike in rates this year.

Gold rose about 1 percent to hover near one-month highs and crude jumped nearly 2 percent amid heightened tensions in the Middle East.

The European economic calendar remains light, with consumer and producer prices from the U.K. and EU harmonized CPI data due later in the day.

U.S. stocks ended mixed overnight while Treasury yields rose as encouraging retail sales and industrial production data along with better-than-expected earnings from Bank of America and Goldman Sachs revived Fed rate hike fears.

The Dow inched up marginally, while the S&P 500 ended flat with a negative bias and the tech-heavy Nasdaq Composite dropped 0.3 percent.

European stocks ended little changed on Tuesday as investors reacted to a slew of downbeat earnings reports and higher bond yields.

The pan European STOXX 600 slipped marginally. The German DAX and France's CAC 40 both ended flat with a positive bias while the U.K.'s FTSE 100 rose 0.6 percent on favourable labour market data.