By Peter Nurse
Investing.com – European stock markets are expected to open higher Wednesday, recovering some of the sharp losses since the start of the Russia-Ukraine war ahead of this week’s European Central Bank meeting.
At 2 AM ET (0700 GMT), the contract in Germany traded 1.2% higher, in France climbed 2.1% and the contract in the U.K. rose 1.1%.
European stock markets have been hit hard by Russia’s invasion of Ukraine, with the associated Western sanctions pushing commodity prices to record levels, with oil prices, in particular, soaring amid concerns about supply disruptions.
The announcement late Tuesday that the U.S. will ban Russian oil imports added to the volatility, with Britain adding it would phase these imports out by the end of the year. The EU has published plans to cut its reliance on Russian gas by two-thirds this year.
Russia issued an order saying it would restrict trade in some goods and raw materials in response to sanctions.
However, investors are set to take advantage of these sharp losses – the is down more than 8% over the last week – to buy some heavily discounted stocks ahead of Thursday’s meeting, with the specter of stagflation raising expectations that policymakers might delay rate hikes until late in the year.
Ahead of this, Russian forces have intensified their bombardment of Ukraine’s capital Kyiv, while iconic American brands like McDonald’s (NYSE:), Starbucks (NASDAQ:), PepsiCo (NASDAQ:) and Coca-Cola (NYSE:) have announced they are halting business in Russia as a response.
In corporate news, earnings continue to roll in across Europe, with Vivendi (OTC:), Adidas (OTC:), Continental (DE:), Deutsche Post (OTC:), Legal & General (LON:) and Prudential (LON:) among the big names reporting Wednesday.
Oil prices pushed higher, extending the recent rally which has seen crude surging more than 30% since Russia, the world’s second-largest crude exporter, invaded Ukraine. Countries have scrambled for oil from different sources amid escalating sanctions on Moscow and fears of further disruptions to oil supply.
Gains have been partially held back by the news that stocks rose by 2.8 million barrels for the week ended March 4, according to data from the American Petroleum Institute Tuesday, against forecasts of a drop. This suggests consumers are reacting to the surging prices at the pump by pulling back on travel.
By 2 AM ET, U.S. crude futures traded 2.1% higher at $126.25 a barrel, while the contract rose 2.2% to $130.84. Both benchmarks hit their highest levels since July 2008 on Monday, with Brent hitting $139.13 a barrel and WTI $130.50.
Additionally, rose 0.7% to $2,058.45/oz, while traded 0.1% higher at 1.0911.