European Stocks Slip Lower; Credit Suisse Slumps on Warning
2022.06.08 11:25
By Peter Nurse
Investing.com – European stock markets edged lower Wednesday in cautious trading ahead of a key European Central Bank meeting, weighed by a profit warning from banking giant Credit Suisse .
By 3:50 AM ET (0750 GMT), the DAX in Germany traded 0.1% lower, the CAC 40 in France fell 0.3%, and the U.K.’s FTSE 100 dropped 0.1%.
Thursday’s policy-setting meeting of the European Central Bank is looming large on the horizon for European investors, with President Christine Lagarde and her colleagues expected to make clear that rate hikes will be coming in the third quarter in response to record inflation levels.
The central banks of Australia and India have already announced rate hikes of 50 basis points this week, and concerns are growing that the ECB could signal a more aggressive tightening path than expected with the Eurozone’s consumer inflation at a record level, over 8%.
Economic data released Wednesday showed that German industrial production rose 0.7% in April, a weaker improvement than expected as pandemic restrictions and war in Ukraine disrupted supply chains.
In corporate news, Credit Suisse (SIX:CSGN) stock fell 5.8% after the embattled lender announced it is set to experience a group-wide loss in the second quarter.
The bank cited the combination of Russia’s invasion of Ukraine, significant monetary tightening by major central banks in response to the substantial increase in inflation, and the unwinding of COVID-related stimulus measures for the quarter’s woes.
On the flip side, Inditex (BME:ITX) stock rose 4.5% after the world’s largest fast-fashion retailer had its best quarter in a decade in the three months through April, as the relaxation of pandemic restrictions across major markets triggered a spending spree on new clothes.
Oil prices inched higher Wednesday, maintaining the recent upward momentum as the U.S. summer driving season kicks into gear and China emerges from virus lockdowns.
Tuesday’s U.S. crude supply data from industry body the American Petroleum Institute showed a build of 1.8 million barrels for the week ended June 3, but this is unlikely to provide much comfort as global crude and oil products supplies remain very tight.
Official data from the U.S. Energy Information Administration is due at 10:30 AM ET (1430 GMT).
By 3:50 AM ET, U.S. crude futures traded 0.7% higher at $120.25 a barrel, after reaching its highest settlement since March 8 on Tuesday. The Brent contract rose 0.5% to $121.20, after closing at the highest since May 31.
Additionally, gold futures rose 0.1% to $1,852.90/oz, while EUR/USD traded 0.1% lower at 1.0687.
