Ukraine, commodity prices, ECB in focus

LONDON — European stocks are set to pull back slightly on Thursday amid a volatile week, as investors monitor the war in Ukraine and fluctuations in commodity prices.

Britain’s FTSE 100 is seen around 37 points lower at 7,164, Germany’s DAX is set to slide around 45 points to 13,803 and France’s CAC 40 is expected to drop around 24 points to 6,364, according to IG data.

The pan-European Stoxx 600 index closed 4.7% higher on Wednesday to notch its best day since March 2020, with commodity prices falling sharply from a recent surge and diplomatic talks between Russia and Ukraine boosting global risk sentiment.

Shares in Asia-Pacific jumped on Thursday, picking up the baton from an overnight bounce on Wall Street, with Japan’s Nikkei 225 jumping more than 4% to lead regional gains. U.S. stock futures were little changed in early premarket trade after the S&P 500 posted its strongest day since June 2020 during Wednesday’s regular trading hours.

Markets have been closely attuned to developments in Ukraine as Russia’s invasion continues. Ukraine accused Russian aircraft late on Wednesday of bombing a children’s hospital in the besieged city of Mariupol despite a cease-fire deal to allow evacuations.

Meanwhile, the Kremlin accused Washington of waging a de facto “economic war against Russia” after the Biden administration announced a ban on Russian oil imports. The U.K. has also vowed to phase out Russian imports by the end of the year.

European investors will also be watching the latest monetary policy announcement from the European Central Bank on Thursday afternoon. The prospect of surging energy prices exacerbating already record high inflation, alongside a potential growth slowdown, poses a headache for policymakers in deciding how quickly to tighten the ECB’s historically loose policy stance.

On the corporate front, Hugo Boss reports earnings before the bell on Thursday, while Credit Suisse releases its annual report and Deutsche Bank presents its Investor Deep Dive.

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