European Stocks Seen Opening Weak

European bourses are expected to open on a cautious note on Wednesday as sentiments remain weak amidst worries of a global slowdown and pain-points from the war in eastern Europe. Russian gas giant Gazprom reportedly threatening Poland and Bulgaria with a cut in gas supplies for not paying in Russian rubles is likely to impact market sentiment. Strict covid curbs in China and its impact on global supply chain and economic growth would also be weighing on the investor sentiment.

Meanwhile, date release before hours showed Germany’s Gfk Consumer confidence number for the month of May decreasing to -26.50 points from -15.70 points in the previous month. Markets were expecting a reading of -16.

On Tuesday, European markets had closed mostly lower as inflation concerns, lockdowns in China and the unresolved political strife in eastern Europe dampened sentiment. Germany’s DAX shed 1.20 percent, France’s CAC 40 dropped 0.54 percent, Switzerland’s SMI weakened 1.26 percent and the pan European Stoxx 600 lost 0.90 percent. U.K.’s FTSE 100 however edged up 0.08 percent.

The Wall Street had plunged heavily on Tuesday as worries of aggressive rate hikes by the Fed had triggered concerns of a recession in the economy. Tesla’s plunge following the Musk-Twitter deal also added to the negative sentiment. Nasdaq-100 shed 3.87 percent to close at 13,009.71 and the Dow Jones Industrial Average dropped 2.38 percent to end at 33,240.18.

The FTSE 100 futures (June) is trading 0.16 percent lower. The DAX Futures (June) is trading 1.32 percent higher. The CAC Futures (May) is trading 0.06 percent lower.

Dollar Index, which measures the strength of the Dollar against a basket of six currencies is currently at 102.26, down 0.04 percent on an overnight basis, after having risen to a fresh 2-year high of 102.40. The EURUSD pair has increased to 1.0653, while the GBPUSD pair has moved higher to 1.2592.

Gold Futures for June settlement is trading at $1899.65 per troy ounce, about 0.23 percent lower than the previous close of $1,904.10 in the backdrop of a hawkish Fed stance that has lifted the Dollar.

WTI Crude Futures for June settlement is trading at $101.87, an overnight rise of 0.17 percent whereas Brent Crude Futures for July settlement is trading at $104.97, up 0.34 percent from the previous close, amidst lingering concerns about how the lockdowns in China would impact economic growth in China and elsewhere.

American stock futures point to positive trends, with the US 30 (DJIA) index up 0.77 percent and US500 (S&P 500) up 0.53 percent.

Asian markets are trading mixed, following a massive overnight decline in Wall Street. South Korean Kospi is the greatest laggard with a 1.43 percent decline. Japan’s Nikkei Index has shed 1.36 percent whereas India’s Nifty 50, New Zealand’s NZX 50 and Australia’s S&P ASX 200 have all dropped between 0.80 and 0.90 percent. Hong Kong’s Hang Seng is trading 0.20 percent higher whereas China’s Shanghai Composite has gained 1.15 percent.

The INSEE reading of consumer confidence of April, is due Wednesday from France. It is seen at 92 versus 91 in the previous month.

U.K.’s Confederation of British Industry’s distributive trades survey for April is also expected on Wednesday.

Euro Area would also be keenly looking out for President Lagarde’s speech, for further cues on monetary policy.

Earnings updates are due from specialty chemicals business Air Liquide, Schneider Electric, software business Dassault Systemes, semiconductor company STMicroelectronics, diagnostics and research company Biomerieux, software maker Worldline and information technology business Atos, from France. Drug manufacturer GlaxoSmithKline, London Stock Exchange Group, Lloyds Banking, communication services provider WPP, house-builder Persimmon, miner Fresnillo, investment company Abrdn, specialty retailer WH Smith and Bodycote from U.K. as well as investment solutions group DWS Group from Germany are also scheduled to release earnings details on Wednesday.

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