European shares slipped into the red at midday on Tuesday as Western leaders began to speak more firmly of an energy embargo on Russia after evidence emerged of war crimes in Ukraine.
The pan-European Stoxx 600 was down 0.09%, with most regional bourses slipping into the red as traders searched for direction.
Horrific images from the liberated northern Ukraine town of Bucha showing dead civilians in the street appeared to galvanise sentiment, with the European Union set to impose a new round of sanctions against Russia, according to French European Affairs Minister Clement Beaune.
Media reports said the EU was planning to propose a mandatory phaseout on coal imports from Russia.
US President Joe Biden was reportedly also set to introduce new measures against Moscow in response to the killings. Russia’s latest sovereign bond coupon payments were stopped by the US Treasury overnight, pushing the country closer to a historic default if it fails to pay within the grace period.
The country was due to make a principal payment of more than $550m on a maturing bond as well as an $84m interest payment on Monday. This would stop it from making the payments through US banks and force it to use dollars reserves.
“The latest bout of public outrage has strengthened the resolve of Western leaders to take further action. Even Germany, which has a high reliance on the import of Russian gas, is looking to refrain from further imports,” said Interactive Investor head of markets Richard Hunter.
“Meanwhile, as countries consider actions to offset the loss of energy supplies, prices remain well supported, such as an oil price which has popped again and has now risen by 41% so far this year.”
Oil prices were around 1% higher to keep them over the $100 mark.
In equity news, shares in Vestas Wind Systems rose as the company unveiled a new 7.2-MW turbine model for low-to-medium wind conditions.
Siemens Gamesa Renewable Energy was also higher as green energy-related stocks gained favour against fears of a supply disruption from the Ukraine war.
