US markets set for higher opening, recovering from sharp sell-off

7.06am: US stocks seen opening higher 

US benchmarks are seen opening higher on Tuesday following a sharp sell-off a day earlier, which saw the Dow declining the most in nearly a year due to possible contagion from the trouble China property market.

Futures for the Dow Jones Industrial Average are up 311 points, or 0.92%, while the S&P 500 futures are over 36 points, or 0.85% higher. Contracts for the Nasdaq exchange are up more than 115 points or 0.77%.

On Monday, US stocks finished lower, with the DJIA shedding 615 points or 1.78% to 33,970. The Nasdaq dropped 330 points, or 2.2% to 14,714. The S&P 500 lost 75 points, or 1.7% to end at 4,358.

“While most of the factors driving yesterday’s sell-off have been on the radar for a while, concerns over the solvency of Chinese retail estate company Evergrande were the proverbial straw that broke the camel’s back, helping to send the Hang Seng to thirteen-month lows in the process,” said Michael Hewson, chief market analyst at CMC Markets UK.

“That said it’s not as if this denouement on the part of Evergrande hasn’t been coming, with the only surprise being why Chinese regulators have allowed it to fester in the way it has.

“The absence of mainland Chinese markets as well as a holiday in Japan, may well have exacerbated yesterday’s sell off, but nonetheless it’s been quite clear for a while now that market nerves about the economic outlook have been rising for several days now.”

In London, FTSE 100 is also higher, rising 1.3% in midday Tuesday trading to 6,986.

Story by ProactiveInvestors