by Monday saw the stock market in Europe take another dip as the economic zone continued to contend with an energy crisis. It joins the wave of recession fears and the series of tightening policies.
Energy Rallies Lower
Stoxx 600 fell after the Russian energy company, Gazprom, stopped gas supply to Europe through Node Stream 1 indefinitely on account of routine maintenance. The energy prices have rallied and resulted in the recovery of the benchmark measure.
Stocks on Wall Street stepped a bit higher following a trying week for stock markets throughout the world.
The Euro pulled back to a low level of twenty years as the US Dollar gained strength. The British Pound gained some stability following the announcement of Liz Truss as the leader of the Conservative party. Truss’s agenda to put the economy on a turbo charge through tax cuts have gotten investors bothered as there is high inflation.
OPEC+ said it will implement an oil cut in October, and the decision has sent oil prices to more gains. In the crypto market, Bitcoin fell under $20,000 again, and gold had no significant change.
Gazprom made the announcement of its pipeline maintenance following the G7’s agreement to cap the prices of oil coming from Russia. The G7’s decision was in response to the ongoing war in Ukraine.
More Rate Increase in Sight
The cost of natural gas in Europe has since climbed by as much as 30% while countries there are working on ways to bring down the high cost. Germany, for example, is drafting a plan to expend $65 billion to protect users.
Countries have been getting ready for the constraints energy cost could bring, as well as the possibility of rationing. This is about the worst result in comparison to expectations when the year began, said BlackRock strategist, Wei Li. He continued by saying underweight stocks might feel right at this point.
The Europe Central Bank and other monetary regulators are ready to continue increasing interest rates as a means of controlling inflation. In spite of the worsening global economy and possible recession, that seems to be their only workable option. The EBC is likely to take the unprecedented step of increasing interest rates by 75 basis points on Thursday.
In Asia, tech stocks in Hong Kong fell as investors gauged the risk of investing in US companies. China also cut down the number of forex banks required to keep as reserves. This move is designed to aid the Yuan which has taken major hits this year.
