Investing.com - European stock markets drifted in subdued trading Tuesday, with investors looking forward to more corporate earnings while worries over the Chinese economic recovery continue to linger.
Chinese worries remain
With little in the way of economic data due in Europe Tuesday, worries over the health of the Chinese economy, the world's second-largest, in the wake of its disappointing growth data have continued, especially given European consumer, technology, industrial and materials sectors all have significant exposure to China.
The luxury sector is also very reliant on sales in Asia, and China in particular, for growth, although the world's second-biggest luxury firm, Richemont (SIX: CFR ), dropped over 10% on Monday, the sharpest one-day percentage fall in over a year, after weakness in the Americas weighed on first-quarter organic sales growth. Its stock fell an additional 0.3% Tuesday.
Quarterly earnings continue
Novartis (SIX: NOVN ) sock rose 2.5% after the Swiss drugmaker raised its full-year earnings guidance, citing strong drug sales as it laid out plans for the spin-off of its generic medicines division Sandoz for early in the fourth quarter.
Swedbank (ST: SWEDa ) stock rose over 2% after the Swedish lender announced a more than doubling of its net profit in the second quarter, benefiting from higher interest income as rates increased.
That said, most of Tuesday’s attention will be on earnings across the pond with results expected from the likes of lenders Morgan Stanley (NYSE: MS ), Bank of America (NYSE: BAC ) and Charles Schwab (NYSE: SCHW ), as well as toy maker Hasbro (NASDAQ: HAS ) and aerospace company Lockheed Martin (NYSE: LMT ).
Oil prices rebound ahead of U.S. inventories
Crude prices edged lower Tuesday, with the focus turning from China's weakness towards a possible tightening of U.S. crude supplies.
Investors were now awaiting more signals from weekly U.S. inventory data, due from the American Petroleum Institute , later in the session, and then the Energy Information Administration on Wednesday. The data is expected to show a decline in stockpiles after a substantially bigger-than-expected build in the prior week.
However, Monday’s disappointing Chinese growth numbers mean sentiment remains weak, with traders looking for more stimulus measures from Beijing, as the government moves to shore up economic growth.
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