European stock markets fell heavily on Wednesday. Investors are weighing escalating geopolitical tensions, weakening global growth outlook and mixed quarterly corporate reports.
The DAX fell 0.3% and the CAC 40 fell 0.1%, while the FTSE 100 rose 0.2%.
Tensions between Russia and Ukraine escalated on Wednesday. Russia's state-owned energy giant Gazprom said it would stop supplying gas to Poland and Bulgaria.
Russia is stopping natural gas supplies to EU members for the first time in 40 years. Following this decision, along with crude oil prices, concerns about Europe's energy security also increased.
Russia demands gas payments in rubles, a situation that most Western countries are not prepared to comply with as it could weaken sanctions.
WTI was up 0.2% at $101.86, while Brent was up 0.2% at $104.84. Both were up around 3% on Tuesday.
European stock indices are also under pressure on concerns that China's insistence on strict coronavirus measures will hurt domestic and global growth and that the Fed's hawkish return could slow growth in the US economy.
These factors were reflected in larger-than-expected declines in consumer confidence in the two major Eurozone economies. Consumer confidence in Germany fell to an all-time low, while in France it fell to the lowest level since 2018.
Today is a big day in terms of earnings report in Europe, especially in the banking sector.
Deutsche Bank (ETR:DBKGn) fell 5.6% after warning that the Russia-Ukraine conflict could undermine full-year results, saying it expects the allowance for loan losses to increase “significantly” this year.
Credit Suisse (SIX:CSGN) fell 1.6%. The bank shared a loss in the first quarter.
Contrary to these names, Lloyds (LON:LLOY), despite the warning that rising inflation poses a threat to the UK economy, improved its outlook for the full year as mortgage demand remained stable and its shares gained 2.4%.
Elsewhere, GlaxoSmithKline (NYSE:GSK) was up 0.7%. The pharmaceutical giant beat expectations in the first quarter thanks to the sale of its COVID-19 treatment.
Shares of Telia (ST:TELIA) gained 1.1% after better-than-expected results as Mercedes Benz Group (OTC:DDAIF) reiterated its full-year target for higher prices that compensated for supply chain problems. DSV (CSE:DSV) also rose 2.7% in its stock, raising its 2022 outlook.
There were also important reports on Wall Street after the close on Tuesday: Alphabet (NASDAQ:GOOGL) reported that first-quarter revenue fell short of expectations, while software giant Microsoft (NASDAQ:MSFT) forecast double-digit revenue growth for next fiscal year.
Key US companies to report on Wednesday include Meta Platforms (NASDAQ:FB), T-Mobile (NASDAQ:TMUS) and Boeing (NYSE:BA).
Most recently, gold futures fell 0.5% to $1,894.90, while EUR/USD fell 0.2% to 1.0616.
