European stocks were lower at the open on Tuesday as investors were spooked by higher German inflation data yesterday, raising fears of faster interest rate rises and a surging oil price as European Union leaders imposed more curbs on Russian crude exports.
The pan-European Stoxx 600 was down 0.38% in early trade. Only Britain’s energy-heavy FTSE 100 was up as the oil price pushed above $120 in the wake of a European Union decision to stop more than two thirds of Russian crude exports in response to its invasion of Ukraine.
“The upwards trajectory of the oil price may well have room left to run until a solid outline of how supply is going to be sourced,” said Hargreaves Lansdown analyst Sophie Lund-Yates.
German EU-harmonised inflation hit 8.7% in May, much higher than forecasts of 8%, and up from 7.8% in April. Meanwhile in France, the figure hit a record of 5.8% in May, up from 5.4% in April, according to preliminary data.
Investors are also eyeing initial May readings for Italy and the euro zone later in the day.
In equity news, shares in B&M European Value Retail fell more than 9% after the company reported flat results for fiscal 2022 and warned of markdowns during the current financial year.
Shares of Dutch specialty chemicals company DSM surged 10% in early trade after it announced a cash and shares merger deal with Swiss peer Firmenich.
German chemicals firm Lanxess jumped more than 11% after announcing a joint venture with private equity firm Advent to buy DSM’s engineering business for €3.7bn.
Unilever shares climbed 7% after the British consumer goods giant named American activist investor Nelson Peltz to its board.
