European stocks muted as Ukraine war, inflation weigh on sentiment
The pan-European Stoxx 600 nudged 0.15% higher in early trade, with banks adding 1.2% to lead gains while health care stocks fell 0.6%.
In terms of individual share price movement, German construction software company Nemetschek jumped more than 11% to lead the European blue chip index after posting strong full-year earnings and issuing promising forward guidance.
At the bottom of the Stoxx 600, British technical product company Diploma fell more than 4% after JPMorgan downgraded the stock to “underweight” and cut its target price.
Investors continue to watch the situation in Ukraine as ongoing peace talks between Moscow and Kyiv fail to make progress. On Monday, Ukraine refused to surrender the port city of Mariupol to Russian forces following an ultimatum from Moscow.
President Volodymyr Zelenskyy told Eurovision News that ultimatums won’t work as trapped Ukrainians will “fight till the end.”
U.S stock index futures were flat in overnight trading after Federal Reserve Chair Jerome Powell said the central bank is open to higher rate hikes to combat rising inflation.
Wall Street’s Monday trading session was volatile as Powell vowed to take “necessary steps” to curb inflation less than a week after the agency raised rates for the first time since 2018. Powell said “inflation is much too high” and added that rates could increase more than the previously approved 25 basis points if needed.
Shares in Asia-Pacific were mixed in Tuesday trade, as China Eastern Airlines shares fell after the carrier’s Boeing 737 passenger jet crashed in southern China on Monday.
Market watchers are also monitoring the omicron subvariant as it spreads across Europe along with one of the worst Covid-19 outbreaks in China since 2020.
