European stocks plunge in choppy trade, oil stock cap drops
European stocks fell slightly in choppy trade on Monday as continued fighting in Ukraine weighed on investor sentiment, while gains in energy stocks helped contain losses.
The pan-European STOXX 600 fell 0.1% after posting its biggest weekly percentage gain since November 2020 on Friday. Investors were watching the war in Ukraine closely, with European Union governments considering an oil embargo on Russia as they met this week with US President Joe Biden for a series of summits aimed at hardening their stance against Moscow.
The news also triggered a rise in oil prices. Brent crude futures rose more than $3 to trade above $111 a barrel, sending the European oil and gas sector up 1.9%. “The European crude embargo should be put back on the table, with the possibility of more than a million barrels of Russian oil a day being snubbed,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown. .
“Given that the Netherlands and Germany together received about a quarter of Russia’s crude and light oil exports, demand would skyrocket for crude supplies from OPEC+ countries.” Oil-exporting London’s FTSE 100 led the gains among its continental peers, up 0.5%. France’s prime index was flat, while Germany’s DAX fell 0.1%.
US Federal Reserve Chairman Jerome Powell was due to speak at the National Association for Business Economics conference at 4:00 p.m. GMT on Monday, while at least half a dozen other policymakers were due to speak throughout the week. week long. Investors will be watching closely for comments that come after a rather well-received start to the monetary tightening cycle from the Fed as the central bank raised U.S. interest rates for the first time since 2018 last week.
“For now, central banks remain focused on bringing inflation down and containing any second-round effects on wages and prices,” said Neil Shearing, chief economist at Capital Economics, adding that the war in Ukraine had not deterred the central bankers from their plans. toughen politics. Julius Baer rose 0.2% after saying it had credit exposure to less than a single digit of customers subject to the sanctions recently introduced in the Russian market.
French trainmaker Alstom fell 0.9% after Spanish public rail operator Renfe said a software glitch disrupted most commuter trains in the city of Madrid as well as some medium and long-haul services distance. Meanwhile, data showed German producer prices maintained their record high in February, jumping 25.9% year-on-year, driven mainly by energy prices.
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