European Stocks Lower; Russia Tensions Heightened By

© Reuters.

By Peter Nurse – European stock markets traded lower Monday with investors remaining concerned about slowing global growth and monetary brisk tightening by central banks to combat soaring inflation.

By 4:20 AM ET (0820 GMT), the in Germany traded 1% lower, the in France fell 1.2%, and the UK’s dropped 0.8%.

European stocks fell last week, with the DAX, CAC 40, and FTSE 100 all down around 2%, amid fears that central banks will hike interest rates aggressively to combat soaring inflation, hurting economic growth in the months ahead.

Data earlier Monday showed China’s was the slowest since June 2020, while this week’s release of Germany’s and preliminary first quarter data from the UK are expected to point to slowing growth in two of Europe’s largest economies.

Russian President Vladimir Putin is leading anniversary celebrations in Moscow of the Soviet Union’s victory over Nazi Germany, and has attempted to defend his invasion of Ukraine.

The West was “preparing for the invasion of our land, including Crimea,” Putin said, according to a Reuters translation.

Adding to the political tensions, Josep Borrell, the EU’s High Representative for Foreign Policy suggested, in an interview with the Financial Times, that the European Union should seize Russia’s foreign exchange reserves to pay for the reconstruction of Ukraine.

In corporate news, Deutsche Post (ETR:) stock slumped 7%, falling to the bottom of the , while Italian defense company Leonardo (BIT:) stock rose 3.3% with European countries looking to boost their defense spending in the wake of Russia’s invasion of Ukraine.

Oil prices edged lower Monday with the focus on talks within the European Union over a Russian oil embargo, which is likely to further tighten global supplies.

European Union governments are set to meet again later this session to work out how to ensure countries most dependent on Russian energy, like landlocked Hungary, Slovakia, and the Czech Republic can cope with the proposed ban on Russian oil. The proposal requires a vote among EU members.

Over the weekend, the Group of Seven major industrialized nations agreed to a similar ban on imports of Russian oil.

However, there still remain concerns over global oil demand, especially with China’s ongoing COVID lockdowns. Saudi Arabia, the world’s top oil exporter, lowered crude prices for Asia and Europe for June on Sunday.

By 4:20 AM ET, futures traded 0.5% lower to $109.20 a barrel, while the contract fell 0.4% to $112.00. Both benchmarks rose around 4% last week for a second week in a row.

Additionally, it fell 0.6% to $1,871.21/oz, while traded 0.3% lower to 1.0516.

Leave a Comment