LONDON — European stocks were lower on Tuesday as global investors remain attuned to the policy direction of the U.S. Federal Reserve and the start of corporate earnings season.
The pan-European Stoxx 600 slid 0.6% in early trade, with tech stocks dropping 1% to lead losses while oil and gas gained 0.6% on the back of a surge in oil prices amid rising tensions in the Middle East.
Global markets have been focused of late on assessing the potential speed and trajectory at which the Fed will move to hike interest rates and tighten its ultra-loose pandemic-era monetary policy.
Meanwhile corporate earnings are beginning to roll in for the fourth quarter of 2021, with Goldman Sachs and PNC Financial among the big names reporting stateside on Tuesday. Bank of America, UnitedHealth and Netflix are also due to report later in the week.
U.S. stock futures were slightly lower in early premarket trading on Tuesday as investors braced for the latest batch of earnings, after markets were closed Monday for the Martin Luther King holiday.
Shares in Asia-Pacific lost momentum on Tuesday to erase earlier gains. The Bank of Japan left its short-term interest rate target unchanged at -0.1%, in line with market expectations, and raised its near-term inflation expectations.
Back in Europe, the Economic and Financial Affairs Council is meeting in Brussels on Tuesday. The meeting comes a day after German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sanchez vowed to work closer together on continental policies despite divergence over the relaxation of EU fiscal rules.
On the data front, the latest ZEW economic sentiment survey is due for Germany and the euro zone on Tuesday morning. Earnings in Europe come from British miner BHP.
Oil prices surged during Asian trading hours, with Brent crude touching a more than seven-year high amid concerns over potential supply disruptions, following attacks by Yemen’s Iran-aligned Houthi rebel group on fuel tankers in the United Arab Emirates.
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– CNBC’s Saheli Roy Choudhury contributed to this report.
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