Europe open: Coronavirus hopes offset 'terrible' industrial production data
Stocks were trading higher again in the middle of the week, boosted by hopeful projections of when the new China coronavirus might peak, offset by a grim reading on the euro area's industrial sector at the turn of the year.
Overnight, China's Zhong Nanshan, the country's top epidemiologist, said the virus could peak in February and clarified that only one person out of a sample of 1,099 had an incubation period of 24 days, with the median length of time until the first symptoms appeared being only three days.
"European markets are on the rise today, with traders emboldened by an optimistic outlook from the top Chinese medical expert [...] with a slowdown in cases providing reason for optimism," said IG's Chris Beauchamp.
Against that backdrop, as of 1000 GMT, the benchmark Stoxx 600 was ahead by 0.29% to 429.59, alongside a 0.62% gain to 13,713.17 for the German Dax, while the FTSE Mibtel was ahead by 0.47% at 24,823.94.
In parallel, front month Brent crude oil futures were adding 2.05% to $55.14 a barrel on the ICE.
On the flip side, Eurostat reported that the bloc's industrial output - excluding construction - contracted at a month-on-month pace of 2.1% in December (consensus: -1.6%), with France and Italy registering the sharpest declines.
Production of capital goods was weakest, slumping by 4.0% from the previous month.
Claus Vistesen at Pantheon Macroeconomics labelled the figures "terrible" and while some of the weakness might be statistical noise, he said it was entirely possible that it could herald a dovish shift by the European Central Bank in March.
"That story could change if the January m/m headlines storm higher—it’s possible based on mean reversion alone—though for now we are on alert on a shift in market sentiment towards further easing," he added.
For his part, speaking from Hong Kong, ECB chief economist, Philip Lane, warned that the coronavirus could deal a "pretty serious short-term hit" to the Eurozone economy, but he expected a bounce back and for the full-year impact to be "relatively minor".