August 13, 2022
European markets open to close, earnings data

LONDON – European shares are expected to open lower on Wednesday, with the regional trend continuing a downward trend this week.

According to IG data, UK’s FTSE index is down 26 points to 7,394, Germany’s DAX is down 34 points to 13,421, France’s CAC 40 is down 29 points to 6,385 and Italy’s FTSE MIB is down 44 points to 22,290.

The lower open market for European shares comes after a slight retreat on Tuesday, tracking risk-off sentiment globally as investors assess whether to further drive last month’s rally.

In the United States, three key averages fell for the second day in a row yesterday, although Dow Jones Industrial Average futures were higher last night.

In regular after-hours trading, House Speaker Nancy Pelosi’s controversial visit to Taiwan stunned investors, who were worried it would further strain already strained US-China relations. China had spent weeks warning him not to travel.

Markets fell further after three Federal Reserve chairmen indicated that further rate hikes would be necessary to tackle high inflation.

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Overnight, shares in Asia-Pacific were mostly higher on Wednesday, with markets in mainland China making major gains despite Pelosi’s visit to Taiwan, which is being closely watched by Beijing.

China’s Foreign Ministry spokesman Hua Chunying tweeted that Pelosi’s visit was a “major political provocation”, while a spokesman for the People’s Liberation Army’s Eastern Theater Command said it would be organized “A series of joint military operations around the island of Taiwan from the evening of 2 August.” Those operations include live shooting of long-range combat fire in the Taiwan Strait and testing of conventional missile firepower, the statement said.

It’s a busy day for earnings in Europe, with companies such as Commerzbank, SokGen, BMW, Banco BPM, Siemens Healthniers and Veolia and Wolters Kluwer among others. On the data front, Euro zone producer prices and retail sales figures for June are due to be released.

— CNBC’s Tanay Machel and Abigail Ng contributed to this report.

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