European markets seen weaker at open as investors turn attention to oil
European bourses are expected to open in the red on Wednesday, as investors gear up for news out of the U.K. while keeping a close eye on the oil market for any sharp price moves.
The London FTSE 100 index is called to open 10 points lower at 7,462, the German DAX down 5 points at 12,810 and the French CAC off 11 points at 5,282, according to IG.
Oil is expected to be front and center on Wednesday for both European bourses and markets overseas, after prices tumbled more than two percent on Tuesday on signs of rising production in key areas of the world.
Investors on Tuesday were particularly troubled over the level of compliance by OPEC and non-OPEC countries to cut production, as new signs emerged that both Libya and Nigeria – who are both exempt from the production reduction deal – saw their oil output bounce back, adding to concerns of a glut in the market. Prices continued to be under pressure on Wednesday.
Meanwhile, the state of the British economy and its political scene will be in focus on Wednesday, as investors look to the British queen’s speech and the formal opening of Parliament.
Queen Elizabeth II’s speech on Wednesday is expected to give an outline of the U.K. government’s proposals when it comes to policies and legislation, for the next session of Parliament.
The Bank of England (BOE) will also be on investors’ minds as the central bank has its latest financial policy committee meeting.
In individual stock news, Whitbread is expected to announce a trading statement, while SAS is set to release new figures. Major airline and defense stocks will continue to be watched on Wednesday, as investors await any more news from the International Paris Air Show in France.
Markets in Asia were mostly lower ahead of Europe’s opening bell on Wednesday, following MSCI’s decision to add mainland Chinese stocks to its emerging markets index gradually and as oil prices came under pressure.
No major data is due out on Wednesday.
Source: CNBC
