© Reuters.
By Peter Nurse
Investing.com – European stock markets slumped Monday, as investors fretted over the economic risks facing the region, including potential energy shortages as Russia halts the supply of gas.
By 03:55 ET (07:55 GMT), the in Germany traded 3.3% lower, the in France fell 2.4%, and U.K.’s dropped 1.1%.
Russia announced late Friday that one of its main supply pipelines to Europe would remain shut indefinitely, scrapping a Saturday deadline for gas flows down the pipeline to resume.
This announcement came shortly after G-7 finance ministers had agreed on a plan to impose a price cap on Russian oil exports, aiming to limit the funds President Vladimir Putin’s government will receive as Russia’s invasion of Ukraine continues.
The Nord Stream pipeline was already running at just 20% of capacity before flows were halted last week for maintenance. This move pushed up already , and will spark further fears of energy rationing in Europe as winter approaches.
The soaring energy prices can only add to inflation, which is already at in the Eurozone and fast approaching double digits.
This is putting pressure on the to act, and the policymakers are set to respond on Thursday with a second, large interest-rate hike, tightening before economic conditions deteriorate further.
That said, economic data showed that economic activity in the Eurozone contracted further in August, with the S&P Global falling to 48.9 from 49.9 the previous month.
in the region could grow 0.4% on the month in July, but this only represents a small rebound from the 1.2% fall the previous month. The release is expected to fall 0.7% in July.
Elsewhere, Foreign Minister is widely expected to be named the new U.K. prime minister later Monday, and she will have her hands full immediately with the county facing a cost of living crisis, industrial unrest, and a prolonged recession.
In corporate news, Countryside Properties (LON:) stock soared over 5% after the Wall Street Journal reported it was set to merge with fellow U.K. home builder Vistry (LON:), down 1.3%, to form a $3.2 billion residential developer.
Oil prices jumped higher Monday ahead of a meeting of top producers, with traders reacting to the possibility of a cut in output to support the market.
The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, meets later Monday, and is largely expected to keep current output levels despite supplies remaining tight.
However, Saudi Arabia, the de facto leader of the group, recently floated the idea of cutting production levels to support prices, and this potential is supporting the market.
Oil prices have fallen in the past three months, after touching multi-year highs in March, on concerns that interest rate hikes and COVID-19 curbs in parts of China, the world’s top crude importer, may slow global economic growth and cool oil demand.
By 03:55 ET, futures traded 2.4% higher at $88.94 a barrel, while the contract rose 2.4% to $95.26.
Additionally, fell 0.1% to $1,721.65/oz, while traded 0.4% lower at 0.9912.
Be the first to comment