Europe open: Stocks slip ahead of Ukraine war talks, ECB meeting

by | Mar 10, 2022

European shares were slightly lower at the open on Thursday after the previous session’s rally, as investors eyed the war in Ukraine and a European Central Bank meeting later in the day.
The pan-regional Stoxx 600 index was 0.9% lower in early deals with France’s CAC-40 down 1.5% and Germany’s DAX off by 1.69%. Brent crude was up 5.27% to $117 a barrel.

Brent and West Texas Intermediate plunged on Wednesday after the United Arab Emirates said it supported higher production and encouraged Opec members to do the same just one week after the cartel rebuffed calls to raise production levels, saying it would stick to an earlier plan to gradually increase output.

Europe’s benchmark index closed 4.7% higher on Wednesday – its best day since March 2020 – as commodity prices fell sharply and diplomatic talks between Russia and Ukraine boosted sentiment.

Foreign ministers from Russia and Ukraine will meet in Turkey on Thursday in the first high-level talks between the two countries since Moscow invaded its neighbour.

Investors were awaiting the latest ECB monetary policy announcement and how central bankers will deal with surging energy prices, inflation and the impact on growth from the war.

“The conflict is ongoing and the road to resolution remains unclear, with any further military developments likely to unsettle sentiment immediately,” said Richard Hunter at Interactive Investor.

“In addition, until such time as it becomes possible to gauge the full economic impact of the conflict, concerns over the derailment of global growth will persist, exacerbated by the heightened levels of inflation which were in place even before the beginning of the conflict.”

“The imminent announcements from the major central banks will prove pivotal in near term sentiment, with an expectation that there will be some softening of the hawkish tones which had recently been promoted in view of the need to counter inflation.”

In equity news, Carlsberg shares slipped after the Danish brewer pulled guidance due to uncertainty about the large Russian market and said it had begun a strategic review of its business in the country.

German fashion house Hugo Boss fell 4% after announcing a temporary halt to its business in Russia but forecast an upbeat 2022.

Portuguese retailer Jeronimo Martins shares fell 6.34% despite reporting better-than-expected first-quarter earnings.

Polymetal shares continued to rally after last week’s battering in the wake of sanctions on Russia, rising by almost a quarter.

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