European Shares Set For Cautious Start

stockmarkets aug16 03mar22 lt

European stocks are seen opening flat to slightly lower on Thursday as fighting rages in Ukraine for an eighth day.

According to reports, Russian troops have seized Ukraine's Kherson, a strategically important city.

Just hours after Ukrainian President Volodymyr Zelensky's video address, Kiev was reportedly hit by at least four explosions, the BBC said.

Fitch Ratings has downgraded Russian sovereign debt to junk, the biggest on any European nation since World War II. MSCI Inc. and FTSE Russell are cutting Russian equities from widely-tracked indexes.

Asian markets were moving higher after Fed Chair Jerome Powell vowed to contain inflation with higher interest rates, despite uncertainties stemming from Russia's invasion of Ukraine. Gold traded firm despite a rise in bond yields and the dollar.

"It is the Fed's responsibility to control inflation," Bullard said on Wednesday but didn't say how much he wanted rates to increase.

His colleague, Chicago Fed Bank President Charles Evans said monetary policy is currently "wrong-footed" and needs to be upwardly adjusted toward neutrality.

With no end in sight to the Russia-Ukraine crisis, Brent crude oil futures rose above $118 a barrel.

In economic releases, the European Central Bank releases the minutes from its February 2022 meeting later in the day.

Across the Atlantic, trading may be impacted by reaction to reports on weekly jobless claims, factory orders and service sector activity ahead of the all-important jobs report due Friday.

Earlier in the day, service sector activity readings from China and Japan disappointed investors.

U.S. stocks rose sharply overnight, as private payrolls data topped forecasts, yields rebounded from the early-week losses and Fed Chair Powell said he would propose a quarter-point interest-rate hike at the Fed's next meeting, rather than a half-point.

The Dow climbed 1.8 percent, the tech-heavy Nasdaq Composite surged 1.6 percent and the S&P 500 spiked 1.9 percent.

European stocks reversed early losses to end on a firm note Wednesday, as commodity-related stocks surged on the back of firm metal and energy prices.

The pan European Stoxx 600 gained 0.9 percent as oil and natural gas prices continued their rapid advance.

The German DAX rose 0.7 percent, France's CAC 40 index rallied 1.6 percent and the U.K.'s FTSE 100 added 1.4 percent.

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