European stock markets had a mixed day on Tuesday as oil prices reached a 10-month high of $95 per barrel, causing supply concerns. The FTSE 100 in London rose by 0.3%, while the CAC in Paris was 0.2% higher and the Frankfurt DAX was almost 0.1% lower. The increase in oil prices is due to worries of a supply deficit following output cuts by Saudi Arabia and Russia, which have been extended until the end of the year. Despite appearing technically overbought, the momentum behind the price increase remains strong.
Analysts have highlighted the potential impact of rising oil prices on inflation, as it tends to lead to increased costs for goods and services. There are concerns about the inflationary pressures this could exert on the global economy and its impact on the balance between growth and inflation. Despite these concerns, equity markets have proven surprisingly resilient.
In the US, S&P 500 futures and Dow futures were both up by 0.1%, while Nasdaq futures advanced by 0.1%.
In Asia, shares fell due to worries about the Chinese property sector. The Nikkei in Japan declined by 0.9%, while the Hang Seng in Hong Kong gained 0.3%. The US markets closed slightly higher on Monday, with the S&P 500 and the Nasdaq Composite both edging up.
Looking ahead, there are several key events to watch, including the release of the OECD’s global economic outlook and the Eurozone inflation report for August.
Sources:
– Capital.com
– Yahoo Finance