By Peter Nurse
Investing.com - European stock markets are seen weakening at the open Tuesday, following the previous session’s tech-led selloff on Wall Street on increased inflation worries.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.4% lower, CAC 40 futures in France dropped 1.1% and the FTSE 100 futures contract in the U.K. fell 1.1%.
The Dow Jones Industrial Average closed 0.1%, or 35 points, lower Monday, snapping a five-day win streak. The losses were more pronounced in the other indices, with the S&P 500 closing 1% lower and the tech-heavy Nasdaq Composite particularly hard hit, slumping 2.6%.
Investors have turned their backs on longer-duration growth stocks as ongoing inflation pressures, with commodity prices surging, increased worries that the Federal Reserve will be forced to tighten its ultra-easy monetary policies earlier than it is currently guiding for.
Adding to the theme, China's factory gate prices rose at the fastest rate in three and a half years in April, data showed earlier Tuesday, with PPI rising 6.8% from a year earlier, ahead of a 4.4% rise in March, as the world's second-largest economy gathered momentum after strong growth in the first quarter.
These inflation concerns will mean the U.S. CPI report will be at the forefront of investors’ attention when it’s released on Wednesday.
Ahead of that, and back in Europe, the Germany’s ZEW survey of economic sentiment for May will be the main data release, and is expected to show an improvement in confidence in the Eurozone’s most important economy.
In corporate news, German conglomerate Thyssenkrupp (DE:TKAG) raised its full-year outlook for the second time in three months, boosted by a global economic recovery that drove demand for steel, car parts and materials.
German utility E.ON (DE:EONGn) swung to a profit in the first quarter of the year and confirmed its outlook and dividend policy, while earnings are also due from the likes of French video game company Ubisoft Entertainment (PA:UBIP) and German engineering firm Bilfinger (DE:GBFG).
Oil prices slipped Tuesday, with the markets seemingly expecting only minor localized disruption to U.S. supplies from Friday’s cyber attack on a major pipeline operator.
Colonial Pipeline, the largest fuel pipeline in the United States, said Monday it expects to "substantially" restore operational service by the end of the week. Already segments of its Texas-to-New Jersey line are being brought back online, easing some of the most immediate concerns that the major population centers on the U.S. East Coast could be affected.
U.S. crude futures traded 0.3% lower at $64.73 a barrel, the Brent contract fell 0.3% to $68.11, while Gasoline futures on the New York Mercantile Exchange dropped 0.3% to $2.1263 a gallon.
Later in the session, the Organization of Petroleum Exporting Countries will publish its monthly oil market report, which will include April production numbers for the group, along with their latest outlook on the market.
Additionally, gold futures fell 0.1% to $1,836.35/oz, just off a three-month high, while EUR/USD traded 0.1% higher at 1.2137.