By Peter Nurse
Investing.com - European stock markets are expected to open marginally higher Wednesday, continuing the global rally amid confidence of the expected resumption of Russian gas supply to Europe, easing fears of a regional energy crisis.
At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.2%, and the FTSE 100 futures contract in the U.K. rose 0.3%.
European markets are set to continue the positive tone seen in Asia overnight after the main indices closed sharply higher on Wall Street on Tuesday, as reasonably healthy corporate earnings diluted fears aggressive monetary tightening would weigh heavily on companies’ bottom lines.
The blue-chip Dow Jones Industrial Average closed Tuesday over 750 points, or 2.4%, higher, the broad-based S&P 500 gained 2.8%, and the tech-heavy Nasdaq Composite rose 3.1%.
Additionally, Netflix (NASDAQ:NFLX) reported its second quarter numbers after the close, with the streaming giant predicting it would return to customer growth this quarter, after losing 970,000 subscribers in the quarter, much better than the 2 million it had previously projected.
Back in Europe, Russian gas flows via the Nord Stream 1 pipeline are likely to restart on time on Thursday after the completion of scheduled maintenance, Reuters reported citing sources, easing investors' concerns about gas supply to Europe.
Still, gains are likely to be limited as investors await Thursday’s important European Central Bank meeting, which is widely expected to result in the central bank’s first interest-rate hike since 2011 later this week.
Policymakers signaled at the last meeting in June that a quarter-point hike was likely this time around, but there still is an air of uncertainty surrounding the gathering after a Reuters report on Tuesday suggested the ECB was weighing a 50-basis-point rate hike with Eurozone inflation running at a hefty 8.6% on an annual basis.
Ahead of that, U.K. data showed the extent of the regional inflationary pressures, as consumer prices rose 9.4% in June on an annual basis, up from the previous month’s 9.1%, and climbing at its fastest pace in 40 years.
In corporate news, Akzo Nobel (AS:AKZO) reported weaker-than-expected quarterly core earnings, with the Dutch paints maker citing new coronavirus restrictions in China and slowing demand for decorative paints in Europe.
Nordic telecom operator Telia's (ST:TELIA) quarterly core earnings beat market expectations, helped by growth in its telecom business, while Dutch semiconductor equipment maker ASML Holding (AS:ASML) reported higher second-quarter net profit amid record new bookings.
Oil prices slipped lower Wednesday as industry data pointed to weakening demand in the U.S., the largest consumer in the world.
Numbers from the American Petroleum Institute on Tuesday showed U.S. stocks of crude rose by 1.86 million barrels during the week to July 15, while gasoline inventories rose by 1.29 million barrels during the week, following on from an increase of 2.9 million barrels the previous week.
The back-to-back increases in inventories, even during the busy summer driving season, suggests demand for fuel could be ebbing, and throws the official release from the U.S. Energy Information Administration later in the session firmly into focus.
By 02:00 AM ET, U.S. crude futures traded 1.4% lower at $99.37 a barrel, while the Brent contract fell 1.2% to $106.10.
Additionally, gold futures fell 0.3% to $1,706.05/oz, while EUR/USD traded 0.2% higher at 1.0239.