© Reuters
By Peter Nurse
Investing.com – European stock markets are expected to open higher Tuesday, building on the previous session’s positive start to the new quarter as investors seek out bargains.
At 02:00 ET (06:00 GMT), the contract in Germany traded 1.2% higher, in France climbed 1.1% and the contract in the U.K. were up 0.7%.
European equities suffered during the third quarter on concerns of slowing growth and aggressive monetary policy tightening, with the pan-European index dropping 6%. It actually fell 7.8% in September, its worst performance since June.
However, the new quarter has started on a more upbeat note, with some deeming the sector oversold and ripe for bargain hunting.
Helping the tone was the decision of the U.K government to for top earners. That said, this only rules out a small percentage of the planned 45 billion pounds of unfunded tax cuts announced last week, and seriously undermines the authority of both the Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng.
Also helping sentiment was raising interest rates by a smaller-than-expected 25 basis points earlier Tuesday.
“Investors are starting to doubt central banks globally will remain aggressive with fighting inflation as financial stability risks are growing,” said Ed Moya, an analyst at Oanda.
The economic data calendar is largely empty Tuesday, although investors will keep an eye on the August for further clues on the inflationary pressures in the region. The index is expected to rise 4.9% on the month and to be up 43.1% on an annual basis.
In corporate news, Credit Suisse (SIX:) will remain in the spotlight, as investors seek news about its restructuring plan amid concerns the Swiss bank will not be able to fund the reorganization without asking for extra funds.
Oil prices edged higher Tuesday, continuing the previous session’s positive tone as the market looks forward to Wednesday’s OPEC+ meeting amid expectations of a substantial cut in crude production.
The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are scheduled to meet tomorrow, and speculation is rife the cartel will agree to an output cut of more than one million barrels a day.
The move would be the biggest supply cut since the COVID-19 pandemic, and comes after a drastic fall in oil prices since the middle of the year.
By 02:00 ET, futures traded 0.5% higher at $84.03 a barrel, while the contract rose 0.6% to $89.41. Both benchmarks gained more than 4% on Tuesday, the largest daily gain since May.
Additionally, rose 0.6% to $1,711.20/oz, while traded 0.2% higher at 0.9841.
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