European stocks set to edge higher as traders monitor Evergrande situation
- Shares of China Evergrande Group in Hong Kong fell around 7%.
- The Wall Street Journal reported Thursday that Chinese authorities have told local officials to prepare for a potential demise of Evergrande.
LONDON — European stocks are set for a fairly flat open on Friday as investors react to central bank policy decisions and monitor developments surrounding China Evergrande Group.
The U.K.'s FTSE 100 is set to open higher by 2 points at 7,077, Germany's DAX up 10 points at 15,650 and the French CAC up 1 point at 6,698, according to IG.
In Asia, stocks in Asia-Pacific were mixed in Friday trade. Shares of China Evergrande Group in Hong Kong fell around 7%. The Wall Street Journal reported Thursday that Chinese authorities have told local officials to prepare for a potential demise of Evergrande. Uncertainty also remains around whether Evergrande will pay the interest that was due Thursday on a dollar-denominated bond.
In an exclusive interview on Thursday, European Central Bank President Christine Lagarde told CNBC she believes Europe's direct exposure to the embattled Chinese property company Evergrande would be "limited."
In other news, the Bank of England on Thursday kept monetary policy unchanged and downgraded economic growth projections for the third quarter of this year. This came after the U.S. Federal Reserve indicated on Wednesday that it doesn't see an imminent rollback of the monetary stimulus that has been supporting the economy throughout the pandemic.
"If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted," the Fed's post-meeting statement said, however. The central bank has been buying $120 billion a month of Treasurys and mortgage-backed securities since the start of the Covid crisis.
There are no major earnings release in Europe on Friday, while Germany's IFO is set to release a business climate index at around 9 a.m. London time.
Traders will also be gearing up for German federal elections this weekend with early projections of the result set to come in on Sunday evening.
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