By Peter Nurse
Investing.com - European stock markets edged higher Tuesday, helped by reassuring comments from a top ECB official, while investors monitor the Ukraine war as well as U.S. monetary policy developments.
By 5:05 AM ET (0905 GMT), the DAX in Germany traded 1% higher, the CAC 40 in France traded up 0.8%, while the U.K.’s FTSE 100 gained 0.6%.
European equities have been weighed over the last month by expectations the Ukraine war, and the associated spike in energy prices, would lead to slower growth in the region.
However, while the conflict will dent Eurozone growth, the block is still set to expand, even if the conflict escalates, European Central Bank Vice President Luis de Guindos said on Tuesday.
"So, we can so far dismiss the possibility of stagflation because even in the weakest scenario we are looking at growth of around 2% in 2022," he told a conference, referring to a phenomenon of high inflation coupled with stagnating growth.
Meanwhile, Russian troops have continued their bombardment of several cities in Ukraine, with the southern port of Mariupol having become a focal point while attacks were also reported to have intensified on the second city of Kharkiv.
Elsewhere, investors are also digesting Monday’s hawkish comments from Federal Reserve Chairman Jerome Powell in the wake of last week’s interest rate hike of 25 basis points, the likely start of a sustained tightening cycle.
Powell said the central bank must move "expeditiously" to raise rates and possibly "more aggressively" to keep inflation from getting entrenched. Influential investment bank Goldman Sachs (NYSE:GS) now expects the Fed to raise interest rates by 50 basis points at both its May and June meetings.
In corporate news, Just Eat Takeaway (AS:TKWY) stock rose 2% after Europe’s largest online food delivery service agreed a "long-term global strategic partnership" with U.S. fast food giant McDonald's (NYSE:MCD).
Fortum (HE:FORTUM) stock rose 0.4% after the Finnish utility agreed to sell its 50% stake in Fortum Oslo Varme for 10 billion Norwegian crowns ($1.14 billion), while Nokian Renkaat (HE:TYRES) stock climbed 2.5% after the tire manufacturer said it has decided to continue production in Russia to ensure it retains control of its local factory.
Oil prices fell Tuesday, handing back some of the previous session’s extended gains, while European Union governments continue to discuss joining the United States in sanctioning Russian oil in return for Moscow’s invasion of Ukraine.
Attacks on Saudi Arabian oil facilities by Iranian-aligned Houthis over the weekend have also added jitters to the market.
By 5:05 AM ET, U.S. crude futures traded 1.3% lower at $108.53 a barrel, while the Brent contract fell 1.2% to $114.20. Both contracts had settled up more than 7% on Monday.
U.S. crude oil supply data from the American Petroleum Institute are due later in the day.
Additionally, gold futures fell 0.3% to $1,923.85/oz, while EUR/USD traded 0.1% lower at 1.1010.