Investing.com -- European stock markets traded sharply lower Tuesday, with risk sentiment hit by heightened geopolitical tensions after Russian President Vladimir Putin issued a warning with an updated nuclear doctrine.
At 09:50 ET (14:50 GMT), Germany’s DAX index fell 1.3%, France’s CAC 40 slipped 1.5%, and the UK’s FTSE 100 dropped 0.5%.
Putin issues nuclear warning
Russian President Vladimir Putin issued a warning to the West earlier Tuesday, lowering the threshold for a nuclear strike just days after the Biden administration reportedly allowed Ukraine to fire American missiles deep into Russia.
Russia would now consider a nuclear strike if it, or its ally Belarus, faced aggression "with the use of conventional weapons that created a critical threat to their sovereignty and (or) their territorial integrity", the new doctrine said.
This represented a change from the previous iteration which stated that Russia may use nuclear weapons in case of a nuclear attack by an enemy or a conventional attack that threatened the existence of the state.
The Kremlin said the aim of the updated nuclear doctrine was to make potential enemies understand the inevitability of Russian retaliation for an attack.
These heightened geopolitical tensions prompted investors to shift from risky assets to safe havens.
Eurozone CPI confirmed at 2.0%
The eurozone’s consumer inflation reading was confirmed at 2.0% in October on an annual basis, in line with the European Central Bank's target.
Although the inflation rate remains key in determining ECB monetary policy, officials have recently expressed concerns over the damage that expected new U.S. trade tariffs would do to economic growth in the region.
"The balance of macro-risks has shifted from concerns about high inflation to fears over economic growth," ECB Vice-President Luis de Guindos told an event in Frankfurt on Monday.
"The growth outlook is clouded by uncertainty about economic policies and the geopolitical landscape, both in the euro area and globally. Trade tensions could rise further, increasing the risk of tail events materialising."
Thyssenkrupp predicts turnaround
In the corporate sector, Thyssenkrupp (ETR:TKAG) stock soared almost 10% despite reporting a €1 billion impairment on its Steel Europe division.
The German industrial giant also announced a net loss of €1.5 billion for the fiscal year, but crucially expects to swing to profit in the current fiscal year, indicating that a turnaround plan that includes restructuring its ailing steel division is making progress.
Imperial Brands (OTC:IMBBY) stock rose 3% after the tobacco giant delivered an upbeat report, posting a 4.6% rise in adjusted operating profit for the fiscal year ending Sept. 30.
This growth was driven by improved profitability in its tobacco and next-generation products businesses, alongside strong performance in its distribution arm.
Crude oil prices rebound
Crude oil prices rose Tuesday, rebounding after early losses as the raised geopolitical tensions could impact the global supply outlook.
By 09:50 ET, Brent crude climbed 0.4% to $73.60 per barrel, while U.S. crude (WTI) rose 0.5% to $69.53 per barrel.
The initial boost on Monday, driven by news of a production halt at Norway’s Johan Sverdrup field due to an onshore power outage, had waned as prioduction was partially restarted. However, the unstable situation in eastern Europe added a risk premium.
(Navamya Archarya contributed to this article.)