BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - Negative sentiment is expected to prevail in stock markets in Europe on Tuesday morning amidst a tech-led plunge in Asian markets that spilled over from Wall Street. The progress in restoration of oil supplies through the Strait of Hormuz as well as a potential further decline in crude oil prices could however limit losses. Market spotlight would also be on the U.S.-Iran peace negotiations, political developments in the U.K. as well as the PMI data due from the region.
Wall Street had closed on a mixed note on Monday amidst positive sentiment generated by progress in oil supplies and losses in megacap tech stocks. The Dow Jones Industrial Average added 0.29 percent to finish trading at 51,712.71. The S&P 500 slipped 0.37 percent to finish trading at 7,472.79. The tech-heavy Nasdaq Composite lost 1.3 percent to close trading at 26,166.60. Loses in SpaceX as well as Alphabet weighed heavily on sentiment.
Major European markets had finished trading on a mostly positive note on Monday as lower energy prices supported sentiment. U.K.'s FTSE 100 surged 0.72 percent to finish trading at 10,437.85. Germany's DAX gained 0.62 percent to end Monday's trading at 25,139.69. Switzerland's SMI strengthened 0.54 percent to close trading at 13,848.51. The pan-European Stoxx-50 added 0.35 percent to finish trading at 6,315.06. France's CAC 40 however lost 0.25 percent to close at 8,400.11.
Current indications from the European stock futures indicate an overwhelmingly negative sentiment. The DAX Futures (Sep), the FTSE 100 Futures (Sep) as well as the pan-European Stoxx 50 Futures (Sep) are all trading more than a percent below the flatline. The CAC 40 Futures (Jul) is trading 0.77 percent lower whereas the SMI Futures (Sep) is trading 0.71 percent lower on Tuesday.
American stock futures are trading in negative territory. The US 30 (DJIA) is trading 0.33 percent lower, whereas the US500 (S&P 500) is trading 0.97 percent below the flatline.
Asian stock markets are trading on a heavily negative note, tracking overnight losses on Wall Street as a selloff in major technology stocks weighed on sentiment. Fears of rate hikes by the Fed also weighed on sentiment. South Korea's KOSPI has tumbled 8.1 percent. Japan's Nikkei 225 has plunged 2.97 percent. Hong Kong's Hang Seng has declined 1.67 percent. China's Shanghai Composite has shed 1.1 percent. DJ New Zealand has shed 0.75 percent. Australia's S&P ASX 200 has lost 0.37 percent. India's Nifty 50 is however trading 0.07 percent above the flatline.
Amidst the interplay of a hawkish monetary policy outlook by the Fed and easing of hostilities in the Middle East, the greenback is firm around the flatline. The Dollar Index, a measure of the U.S. dollar's strength relative to six currencies, is currently trading at 101.05, edging up 0.03 percent from 101.02 at the previous close.
The EUR/USD pair has slipped 0.07 percent to trade at 1.1420 whereas the GBP/USD pair has dropped 0.14 percent to trade at 1.3234. The USD/CHF pair has rallied 0.04 percent to trade at 0.8090. The EUR/GBP pair is trading 0.09 percent higher at 0.8630. Amidst repeated warnings of intervention by the Japanese govt to defend the yen, the EUR/JPY pair has slipped 0.01 percent to 184.63, and the GBP/JPY pair has dropped 0.05 percent to 213.95.
Both the crude oil benchmarks have retreated amidst reports of steadily increasing traffic through the Strait of Hormuz. Brent Crude Futures for September settlement is trading at $76.93, around 0.76 percent lower than $77.52 at the previous close. WTI Crude Futures for August settlement is currently trading at $73.34, having slipped 0.70 percent from $73.86 at the previous close.
Despite the decline in crude oil prices, fears of rate hikes from the Federal Reserve have dampened the sentiment for the yellow metal. Gold futures for August settlement have plunged 1.54 percent from the previous closing level of $4,202.70. It is currently trading at $4,137.80.
Among economic data releases, PMI updates for June are due from France, Germany, Euro Area as well as the United Kingdom. Also due for release are the Business Confidence readings for June from France, Current account details for the first quarter from Switzerland, and the CBI Industrial Trends Orders for June from the U.K.
Major updates to earnings due from the region on Tuesday include ICON, Telecom Plus, Vente Unique.com and Dialight.
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