European markets head for mixed open as China’s Covid policy takes center stage

Holly Ellyatt

European markets are heading for a mixed open as investors continue to monitor news from China over Covid restrictions.

Stocks in Hong Kong led gains in the Asia-Pacific alongside Chinese indexes after media reports said China’s state council will hold a press conference at 3 p.m. Beijing time.

There has been some speculation that some kind of change to China’s zero-Covid policy could be announced given growing unrest over continuing lockdowns.

China saw a drop in the number of daily infections Monday for the first time in more than a week.

China likely won’t make sudden changes to its Covid policy: National University of Singapore

The Chinese government is unlikely to make sudden changes to its zero-Covid policy as that will bring chaos, National University of Singapore Professor Wang Gungwu said on CNBC’s “Squawk Box Asia.”

“If you change the policy suddenly, I think the damage and the consequences would be even worse — it’d be really chaotic because I think the spread of Covid will be absolutely unprecedented,” said Wang.

He added that he expects Chinese leader Xi Jinping to make adjustments on more local levels to ease public dissent.

Wang said Xi doesn’t want to officially admit the “policy has been wrong for quite a while,” but also cannot change it immediately.

– Jihye Lee

Oil prices jump more than a dollar ahead of China briefing

Oil prices climbed ahead of a press conference which will be held by China’s State Council, as investors continue to monitor developments – paring some losses seen on Monday, when it reached the lowest levels in almost a year.

The West Texas Intermediate futures climbed up 1.76% to stand at $78.59 per barrel, while the Brent crude futures climbed 2.28% to stand at $85.00 per barrel.

However, oil markets may be “misjudging news of China’s lockdown,” Rystad Energy wrote in a note.

″[The latest lockdowns’] likely effect on China’s short-term oil demand, particularly in transportation, is likely to be minor,” the note added, citing the company’s own research of real-traffic activity in China.

Even with daily Covid cases continuing to climb, cities like Shanghai have not shown a slowdown in road traffic activity, according to Rystad Energy’s own research.

— Lee Ying Shan

CNBC Pro: Asset manager names 9 ‘cheap’ stocks to buy as recession fears grow

It’s “critical” for investors to be looking at valuations right now as a recession is looming and inflation looks likely to continue, said Steven Glass, managing director of Pella Funds Management.

In this environment, Glass selected a list of nine stocks that he said, “look particularly cheap given their growth outlook.”

— Weizhen Tan

European markets: Here are the opening calls

European markets are heading for a mixed on Tuesday as investors keep a close eye on China amid speculation that the government could make changes to its strict zero-Covid policy.

The U.K.’s FTSE index is expected to open 46 points higher at 7,494, Germany’s DAX down 3 points at 14,401, France’s CAC up 2 points at 6,675 and Italy’s FTSE MIB up 27 points at 24,523, according to data from IG.

Earnings come from Easyjet and data releases include euro zone consumer confidence and business climate data for November.

— Holly Ellyatt

Source : CNBC