European market slumps as oil production lowers

European market slumps as oil production lowers

European stocks ended slightly lower on Tuesday as the oil and gas sector pared gains after the OPEC+ alliance unexpectedly cut production.

Although the pan-European Stoxx 600 index traded higher for most of the session, it temporarily closed down 0.05%, marking the second consecutive day of modest losses.

The financial and insurance services sectors both ended up by 0.5%. However, oil and natural gas stocks suffered the biggest losses, shedding 0.1% after their previous 4% gain on Monday.

Oil prices fell Tuesday after yesterday’s market shock as investor attention turned to demand trends and the impacts of higher prices on the global economy.

The British pound strengthened against the US dollar during the session. It hit a 10-month high of $1.2525 after the Bank of England’s chief economist warned that domestically generated inflation remains a key risk. Data shows that the US job vacancies fell sharply in February, suggesting that the Federal Reserve’s goal of restraining the job market is beginning to pay off. The dollar lost against the major currencies this week on weaker economic data.

Investors also attended Credit Suisse’s last annual general meeting before UBS took over the bank. It was the first time since the bank’s collapse that the lender had faced shareholders who were denied a vote on the $3.25 billion acquisition.

Asia Pacific market ended mostly stronger after the Reserve Bank of Australia left interest rates unchanged at 3.60%.

US stocks were initially higher before falling.

The German DAX ended at 0.14% higher, and France’s CAC 40 was flat. They had elevated the energy-heavy index on Monday; a 1.3% decline in oil and gas stock led the UK’s FTSE 100 up to a 0.5% loss.

Mining was the second-performing sector. It declined by 0.8%, despite earlier gains in the Stoxx 600, led by Swiss miner Glencore, whose hostile takeover bid for Canadian company Teck Resources was rejected.

Effect on other stock markets

US crude futures trade has increased by 4.5% at $79.06 per barrel. Meanwhile, the Brent contract increased by 4.6% to $83.64.

In addition, gold futures declined by 0.8% to $1,970.00 per ounce, while EUR/USD traded below 0.4% to 1.0795.

The Swiss press reports on Sunday that UBS is ready to cut its workforce by 20-30%, adding to the former rival.