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European Stocks Mixed, Dollar Edges Higher; Ceasefire Talks Fail

Published 03/01/2022, 05:06 PM
Updated 03/01/2022, 05:06 PM
© Reuters.

© Reuters.

By Peter Nurse 

Investing.com - European stock markets traded in a mixed fashion Tuesday as investors digested the failure of the ceasefire talks to stop the fighting in Ukraine along with healthy Chinese factory activity data.

By 3:40 AM ET (0840 GMT), the DAX in Germany traded 0.8% lower, the CAC 40 in France dropped 0.7% while the U.K.’s FTSE 100 rose 0.3%.

European equity markets weakened on Monday as the West ramped up the sanctions on Russia in response to its continued invasion of Ukraine, cutting off some of its banks from the SWIFT financial network and limiting Moscow's ability to deploy its $630 billion foreign reserves.

Hopes that talks last night between Russian and Ukrainian officials near the Belarusian border could result in a ceasefire have been dashed as they ended with no agreement, while Russian troops continue to heavily shell the Ukrainian capital Kyiv amid fierce resistance.

That said, Europe has received a largely positive handover from Asia, with investors regaining some composure, helped by Chinese factory surveys, both official and private sector, showing the second-largest economy in the world continues to expand despite cost pressures.

Turning to the corporate sector, Bayer (DE:BAYGN) stock rose 2.9% after the German chemicals giant forecast full-year profit growth on an upswing in demand for its seeds and pesticides.

Shell (LON:RDSa) stock fell 0.6%, continuing Monday’s near 5% selloff, after the energy giant announced its intention to exit its joint ventures with Russian state-owned energy company Gazprom (MCX:GAZP) and related entities due to the Russia-Ukraine conflict.

In terms of economic data, investors will study Eurozone manufacturing activity data for February for signs of strength in this vital sector. The Spanish release came in at 56.9, ahead of January’s 56.2.

In the foreign exchange markets, the dollar pushed higher, with the safe haven yen and Swiss franc pulling back after their biggest rallies in almost seven weeks, while the ruble tried to regain some stability after its crash to an all-time low.

The US Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 96.720.

Oil prices headed higher as the fears of a disruption of supply from Russia, the world's second-largest crude producer, outweighed the potential for a coordinated global release of crude from strategic reserves.

Major oil and gas companies have announced plans to exit Russian operations and joint ventures, while the Western sanctions are making it harder for Russian oil to be purchased by consumers.

By 3:40 AM ET, U.S. crude futures traded 2.6% higher at $98.23 a barrel, having gained more than 4% the previous session, while the Brent contract rose 3% to $100.88, below last week’s seven-year high of $105.79.

Additionally, gold futures rose 0.8% to $1,915.55/oz.

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