By Peter Nurse
Investing.com - European stock markets traded 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.
By 4:10 AM ET (0910 GMT), the DAX in Germany traded 3.7% higher, the CAC 40 in France climbed 3.5%, while the U.K.’s FTSE 100 traded 1.7% higher.
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, while the head of the International Energy Agency, Fatih Birol, responded Wednesday, stating that the agency is ready to bring more oil to the markets by releasing additional stocks, and it would come up with an action plan to "reduce oil in a hurry."
Investors have decided to take advantage of these sharp losses - the DAX is down more than 8% over the last week - to buy some heavily discounted stocks ahead of Thursday’s European Central Bank meeting, with the specter of stagflation raising expectations that policymakers might delay rate hikes until late in the year.
In corporate news, Adidas (LON:0OLD) stock soared over 8% after the German sportswear company forecast an increase in sales of 11-13% for 2022, with a recovery in its China business more than making up for the 250 million euros ($273 million) hit that it expects to take from halting its business in Russia.
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 U.S. crude 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 4:10 AM ET, U.S. crude futures traded 1% higher at $124.99 a barrel, while the Brent contract rose 1.4% to $129.84. Both benchmarks hit their highest levels since July 2008 on Monday, with Brent hitting $139.13 a barrel and WTI $130.50.
Additionally, gold futures fell 0.1% to $2,041.90/oz, while EUR/USD traded 0.5% higher at 1.0955.