European Shares To Drift Lower As Risk Appetite Wanes

(RTTNews) - European stocks may open on a sluggish note Thursday as the "euphoria" over the thought of Fed interest-rate cuts faded, and pandemic fears resurfaced.

The dollar recovered from near five-month lows amid growing geopolitical tensions involving China-Taiwan as well as worries about maritime trade disruptions in the Red Sea and a rapid rise in new Covid-19 cases.

The World Health Organization has classified the SARS-CoV-2 sub-variant JN.1 as a separate variant of interest (VOI) from its parent lineage BA.2.86, due to its rapidly increasing spread.

Gold steadied on expectations of rate cuts by the Federal Reserve in 2024 while oil dipped on demand concerns.

Asian markets traded mixed, with Japan's Nikkei falling 1.7 percent as the yen remained in sight of a five-month high touched last week.

The European economic calendar remains light, with France's monthly business survey results and U.K. public sector finances data awaited later in the day.

Across the Atlantic, trading may be impacted by reaction to a slew of U.S. economic data, including reports on weekly jobless claims, Philadelphia-area manufacturing activity and leading U.S. economic indicators.

There is a lot of focus on the U.S core personal consumption expenditure (PCE) index data due on Friday, heading into the holiday season.

U.S. stocks ended sharply lower overnight as traders took profits after recent strong gains amid signs of falling inflation and dovish Fed bets.

General Mills and FedEx both cut revenue guidance for their fiscal years, overshadowing data showing improving consumer confidence and pick up in housing activity.

The Dow shed 1.3 percent while the tech-heavy Nasdaq Composite and the S&P 500 both fell around 1.5 percent.

European stocks closed mostly higher on Wednesday as investors cheered soft British inflation and improved German consumer confidence data.

The pan European STOXX 600 gained 0.2 percent. The German DAX finished marginally lower while France's CAC 40 edged up 0.1 percent and the U.K.'s FTSE 100 jumped 1 percent.