By Peter Nurse
Investing.com – European stock markets traded higher Tuesday, rebounding after the previous session’s sharp losses although investors remain on high alert over recession risks.
By 03:45 ET (07:45 GMT), the in Germany traded 0.7% higher, the in France rose 0.4%, and U.K.’s climbed 0.3%.
The main European markets slumped on Monday, with the DAX dropping 2.2% and the CAC 40 down 1.2%, after Russia indefinitely closed one of its main gas supply pipelines to Germany, sparking fears of severe energy shortages in Europe during the approaching winter.
While these markets have rebounded Tuesday, fell 1.1% in July on the month, dropping for the fifth month in six, confirming the downward trend that European manufacturing has been in since the Russian invasion of Ukraine in February.
This comes ahead of Thursday’s meeting, which is expected to see the policymakers authorize a second, large interest-rate hike, tightening to combat inflation fast approaching double digits before economic conditions deteriorate further.
The led the way earlier Tuesday, raising its cash target rate by 50 basis points to 2.35%, its highest level since 2014, and the fifth interest rate increase so far this year.
Elsewhere, Liz Truss is set to see Queen Elizabeth at Balmoral Castle later this morning to be confirmed as the next prime minister of the U.K., promising tax cuts as well as support for households facing huge power bills.
In corporate news, Credit Suisse (SIX:) stock rose 2.3% after the banking giant agreed to sell its global trust business to The Bank of N.T. Butterfield & Son Limited (NYSE:) and Gasser Partner Trust.
Lufthansa (ETR:) rose 0.6% after CEO Carsten Spohr said the German airline is planning to hire nearly 20,000 new employees by the end of 2023 as the industry recovers from the pandemic.
Oil prices traded higher Tuesday as traders digested a decision by top producers to trim output levels to support prices amid fears of slowing demand and economic growth.
The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, announced on Monday that it will cut output by a modest 100,000 barrels per day in October, roughly 0.1% of global demand.
Oil prices have fallen since the start of June on concerns that interest rate hikes and COVID-19 curbs in parts of China, the world’s top crude importer, may slow global economic growth and cool oil demand.
By 03:45 ET, futures traded 2.8% higher at $89.31 a barrel, while the contract rose 0.1% to $95.78. Both contracts surged nearly 3% on Monday, but there was no U.S. settlement on Monday, the U.S. Labor Day holiday.
Additionally, rose 0.3% to $1,727.70/oz, while traded 0.6% higher at 0.9985.
