By Peter Nurse
Investing.com - European stock markets are expected to open lower Tuesday, on raised geopolitical concerns as well as fears about the global economic slowdown.
At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.6% lower, CAC 40 futures in France dropped 0.4%, and the FTSE 100 futures contract in the U.K. fell 0.3%.
Stocks markets in Europe have received a negative handover from Asia following media reports in Taiwan suggesting that U.S. House of Representatives Speaker Nancy Pelosi will visit the territory claimed by Beijing later in the day.
Such a move would raise tensions between the world’s two economic superpowers, with Chinese foreign ministry spokesman Zhao Lijian stating on Monday that it would lead to “very serious developments and consequences”.
Additionally, the United States accused Russia of using Ukraine's biggest nuclear power plant as a "nuclear shield" by stationing troops there, risking a nuclear accident.
These developments come as manufacturing PMI data from the United States, Europe and Asia, released over the last couple of days, showed a slowdown in factory activities in July, adding to recession fears.
Also, the Reserve Bank of Australia raised its cash rate 50 basis points to 1.85% on Tuesday and flagged yet more hikes ahead, continuing the aggressive tightening that many central banks have adopted to combat inflation, risking a global economic slowdown.
On the corporate front, the main earnings release Tuesday will come from BP (LON:BP), with the U.K. energy giant expected to follow rival Shell's (LON:SHEL) lead by posting strong quarterly results as high oil and gas prices more than offset the negative impact of its withdrawal from Russia.
The European economic data slate is largely empty Tuesday, with Spanish unemployment the only release of note.
Oil prices dropped Tuesday, continuing the previous session’s selloff on fears a global manufacturing downturn will hit demand ahead of a meeting of top producers to discuss future output.
The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, is set to meet on Wednesday to discuss future supply.
The group had recently rolled back pandemic-era cuts to oil supply, and is now expected to keep production steady despite pressure from the United States to increase output.
By 02:00 AM ET, U.S. crude futures traded 0.8% lower at $93.19 a barrel, while the Brent contract fell 0.9% to $99.09.
Additionally, gold futures rose 0.1% to $1,788.35/oz, while EUR/USD traded 0.1% higher at 1.0268.