European stocks steady amid Apple report concerns

European stocks steady amid Apple report concerns

The euro bounced above $1.02 as investors looked towards an ECB rate decision later this week
The euro bounced above $1.02 as investors looked towards an ECB rate decision later this week. Photo: INA FASSBENDER / AFP/File
Source: AFP

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Europe's main stock markets steadied and the euro rallied against the dollar Tuesday as traders looked ahead to a key European Central Bank meeting later this week.

Asian equity indices closed mixed after an overnight sell-off on Wall Street fuelled by fresh recession worries.

"Apple put the cat among the pigeons following a media report that it plans to pull back hiring and growth spending next year in anticipation of the possible economic downturn," noted Richard Hunter, head of markets at Interactive Investor.

The euro meanwhile jumped more than one percent against the dollar, as traders mulled whether the European Central Bank could hike interest rates more than expected to fight runaway inflation.

The ECB has signalled it would raise eurozone interest rates on Thursday for the first time in more than a decade but is under pressure to do more to tackle spiralling prices.

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It intends to raise borrowing costs by a quarter point, the first such move since 2011.

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"In all likelihood, the ECB will raise interest rates by 25 basis points this week and follow this up with a 50-basis-point move in September," noted Matthew Ryan, head of market strategy at financial firm Ebury.

"That said, we do not rule out a 50-basis-point rate hike at this week's meeting.

"We have already seen most major central banks deliver bumper rate increases in recent weeks in an attempt to control rampant price growth," Ryan added.

The Federal Reserve's aggressive rate tightening this year has sent the dollar soaring against most other currencies in recents weeks.

Lst week, the euro hit parity with the dollar for the first time in nearly 20 years, also on growing fears of a eurozone recession as high inflation hampers growth.

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On Tuesday, the dollar briefly hit a record high above 80 rupees, with the Indian unit hammered by massive outflows of capital as the economy struggles.

While some are predicting inflation may have reached its peak, oil prices -- the key driver of soaring prices -- remain elevated.

Both main contracts fell Tuesday after rocketing more than five percent Monday on expectations that Saudi Arabia would not open up the taps further, with a plea by US President Joe Biden seeming to have fallen on deaf ears.

Traders were keeping a nervous eye on Europe, where a 10-day maintenance shutdown of the Nord Stream 1 pipeline from Russia is due to end this week.

Many fear Vladimir Putin will keep it shut in retaliation for sanctions imposed on Moscow for its invasion of Ukraine.

That would deal another blow to the already creaking eurozone economy and could send crude prices soaring.

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Asian markets track Wall St higher on easing recession fears

Supply fears are trumping worries about a demand hit in China from another possible lockdown in Shanghai as officials struggle to contain another Covid-19 outbreak.

Key figures at around 1100 GMT

London - FTSE 100: UP 0.2 percent at 7,240.04 points

Frankfurt - DAX: UP 0.1 percent at 12,978.47

Paris - CAC 40: UP 0.1 percent at 6,094.85

EURO STOXX 50: FLAT at 3,512.87

Tokyo - Nikkei 225: UP 0.7 percent at 26,961.68 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 20,661.06 (close)

Shanghai - Composite: FLAT percent at 3,279.43 (close)

New York - Dow: DOWN 0.7 percent at 31,072.61 (close)

Euro/dollar: UP at $1.0257 from $1.0146 on Monday

Pound/dollar: UP at $1.2017 from $1.1950

Euro/pound: UP at 85.32 pence from 84.88 pence

Dollar/yen: DOWN at 137.52 yen from 138.13 yen

West Texas Intermediate: DOWN 1.0 percent at $101.63 per barrel

Brent North Sea crude: DOWN 1.1 percent at $105.08 per barrel

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Source: AFP

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