European markets lower as energy, growth fears take hold; euro at 20-year low

Soegeefx AppsEU MarketEuropean markets lower as energy, growth fears take hold; euro at 20-year low

LONDON — European markets were lower on Tuesday morning, tracking global sentiment as a fresh surge in European energy prices deepened fears of a recession and sent the Euro to 20-year lows.

.FTSE FTSE 100 *FTSE 7508.67 -25.12 -0.33 78353640
.GDAXI DAX *DAX 13279.36 48.79 0.37 11082821
.FCHI CAC 40 Index CAC 6398.06 19.32 0.3 9418529

The pan-European Euro Stoxx 600 slid 0.2% in early trade with media stocks pushing the benchmark lower.

Benchmark gas prices in the European Union spiked 13% overnight, as damage to a key pipeline system running oil from Kazakhstan through Russia and into Europe disrupted supply.

The damage comes after Russia said it will stop gas supplies to Europe for three days at the end of the month due to an unscheduled maintenance order on its main Nord Stream 1 pipeline.

The Euro sank back below parity with the dollar to notch a two-decade low and was trading at around $0.9915 shortly before markets opened in Europe on Tuesday morning.

Asia-Pacific markets retreated on Tuesday, taking cues from Wall Street after U.S. stocks closed out their worst session since June on Monday amid mounting concerns about more aggressive monetary policy tightening from the U.S. Federal Reserve.

U.S. stock futures were fractionally higher in early premarket trade, looking to arrest Monday’s broad-based sell-off.

Investor focus this week will be on the Fed’s economic symposium in Jackson Hole, Wyoming, with Chairman Jerome Powell set to deliver a speech on Friday addressing the central bank’s approach to taming inflation.

Back in Europe, investors will be keeping an eye on August flash PMI (purchasing managers’ index) readings out of the euro zone, France, Germany and the U.K., all due to be published throughout Tuesday morning.

Weak PMIs point to third-quarter contraction

August flash PMI (purchasing managers’ index) readings out of the euro zone showed that business activity contracted for a second straight month.

S&P Global’s flash Composite Purchasing Managers’ Index (PMI) fell to 49.2 in August from 49.9 in July. A reading below 50 indicates a contraction.

“The latest PMI data for the euro zone point to an economy in contraction during the third quarter of the year,” said Andrew Harker, economics director at S&P Global, said in a press release.

—Matt Clinch

We expect the euro will depreciate further beyond its two-decade low, says Citi strategist

Head of CEEMEA Strategy at Citi Luis Costa says the bank is expecting the euro to depreciate further as the currency hits a two-decade low.

We expect the euro will depreciate further beyond its two-decade low, says Citi strategist

Risk of ‘financial accident’ presents opportunity for investors, strategist says

Traders work during the opening bell at the New York Stock Exchange (NYSE) on Wall Street in New York City on August 16, 2022.

The growing risk of a “major financial accident” that causes a market capitulation later in the year could open up opportunities for investors to “pile up on quality risk assets,” according to Beat Wittman, chairman and partner at Zurich-based Porta Advisors.

Markets drift lower at the open

The Euro Stoxx 600 Index slipped 0.3% in early deals with media stocks the biggest laggard. Shipping firm Maersk saw its shares dip 2.7% after a price target cut for Citi.

Oil stocks rose by 1% after some steady buying in the commodity markets on Monday afternoon. Both WTI and Brent crude were higher for the session on Tuesday morning.

—Matt Clinch

Oil prices rise after Saudi talks of OPEC output cut

Oil prices climbed on Tuesday morning after Saudi Arabia reportedly cautioned that OPEC+ could cut output to address a recent slide in oil futures.

International benchmark Brent Crude Futures were up just over 0.6% at $97.10 per barrel by 06:30 BST, while U.S. West Intermediate Futures were up by around 0.7% at $91 per barrel.

– Elliot Smith

CNBC Pro: Tech investor Gene Munster reveals why this FAANG stock can top $250

FANNG stocks have rallied strongly in the second half of the year, but tech investor Gene Munster believes one stock could still see further upside ahead.

He tells CNBC why he loves this stock for the “next two to five years.”

— Zavier Ong

CNBC Pro: Morgan Stanley’s top China stock picks to beat market volatility

Morgan Stanley has named a raft of Chinese stocks to help investors navigate what it expects to be a period of elevated market volatility.

The bank’s picks span several sectors and have significant potential upside to their stock prices.

— Evelyn Cheng

Source : CNBC

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