European Stocks Lower on Geopolitical Worries; BP Shines
2022.08.02 10:58
By Peter Nurse
Investing.com – European stock markets weakened Tuesday, on raised geopolitical concerns as well as fears about the global economic slowdown.
By 03:40 AM ET (0740 GMT), the DAX in Germany traded 0.6% lower, the CAC 40 in France fell 0.4%, while U.K.’s FTSE 100 traded flat.
Stock markets in Europe have received a negative handover from Asia following media reports in Taiwan suggesting that U.S. House of Representatives Speaker Nancy Pelosi will visit the territory claimed by Beijing, later in the day.
Such a move would raise tensions between the world’s two economic superpowers, with Chinese foreign ministry spokesman Zhao Lijian stating on Monday that it would lead to “very serious developments and consequences”.
Additionally, the United States accused Russia of using Ukraine’s biggest nuclear power plant as a “nuclear shield” by stationing troops there, risking a nuclear accident.
These developments come as manufacturing PMI data from the United States, Europe and Asia, released over the last couple of days, showed a slowdown in factory activities in July, adding to recession fears.
That said, losses have been limited as quarterly corporate earnings have generally been supportive.
BP (LON:BP) stock rose 4.5% after the energy giant’s second-quarter profit soared to $8.45 billion, its highest in 14 years, as strong refining margins and oil trading helped it boost its dividend and share repurchases.
AP Moeller-Maersk (CSE:MAERSKb) stock rose 1.5% after the Danish shipping giant raised its guidance for the full year on Tuesday, as the long-expected cooling in global freight rates again failed to materialize in the second quarter.
Greggs (LON:GRG) stock rose 2.2% after the U.K.-based bakery chain said sales rose 27% from a year earlier in the first half, allowing it to keep its profit forecast for the year unchanged despite relentless cost pressures.
Oil prices dropped Tuesday, continuing the previous session’s selloff on fears a global manufacturing downturn will hit demand ahead of a meeting of top producers to discuss future output.
The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, is set to meet on Wednesday to discuss future supply.
The group had recently rolled back pandemic-era cuts to oil supply, and is now expected to keep production steady despite pressure from the United States to increase output.
By 03:40 AM ET, U.S. crude futures traded 0.3% lower at $93.58 a barrel, while the Brent contract fell 0.6% to $99.46.
Additionally, gold futures traded flat at $1,787.70/oz, while EUR/USD traded 0.5% lower at 1.0215.
