LONDON: Stock markets diverged while oil prices dipped on Thursday as investors weighed fresh Western pressure on Russia and the prospect of sharper US interest rate hikes.
NATO, G7 and European Union leaders gathered for summits in Brussels, with Washington imposing new sanctions on Russian figures and allies seeking to freeze Moscow out of gold reserves.
In a choppy session, London’s FTSE 100 index finished 0.1 percent higher while the Paris CAC 40 fell 0.4 percent and the Frankfurt DAX shed almost 0.1 percent following a mixed performance in Asia.
Wall Street was having a better day, with the Dow Jones Industrial Average up 0.5 percent after midday, the S&P 500 gaining 0.8 percent and the tech-heavy Nasdaq rising by almost one percent.
Oil prices fell, with Brent North Sea crude, the main international benchmark, dipping under $120 per barrel to trade at around $116.
Prices had gone up in recent days in part because traders believed the EU could impose sanctions on Russian oil.
But Thursday’s summits “will probably not include an oil embargo by the EU, as a number of countries that are heavily dependent on Russian oil — such as Germany — have opposed this,” said Commerzbank analyst Carsten Fritsch.
Soaring energy prices have fanned already sky-high inflation, causing central banks around the world to hike interest rates, in turn threatening economic recovery.
“The war, as well as the Federal Reserve’s battle to fight inflation, have dominated investor sentiment in recent sessions,” said Joe Mazzola, director of trader education at Schwab.
US Federal Reserve chief Jerome Powell signalled Monday that the central bank could raise interest rates to a higher level than expected at its next meetings to tame inflation.
But the European Central Bank is sitting tight on rates for the time being, as it also reacts to weak growth in the eurozone.
Business activity in the single currency bloc slowed in March, according to a closely watched survey Thursday, as high prices and a gloomy outlook raised fears the Ukraine war could snuff out economic recovery.
The S&P purchase managers’ index slipped one point this month to 54.5. A figure above 50 indicates growth.
– Gold reserves –
Elsewhere Thursday, the Moscow Stock Exchange resumed trading of some shares, the second stage in a phased re-opening.
The Moscow exchange suspended trading hours after President Vladimir Putin sent thousands of troops into pro-Western Ukraine on February 24.
Trading resumed for only around 30 of the largest companies that make up the ruble-denominated MOEX Russia Index, which finished 4.4 percent higher after early gains of more than 10 percent.
Russia’s economy and currency have been battered by Western sanctions.
On Thursday, Washington unveiled fresh sanctions on Russian lawmakers and defence contractors, and outlined a push by the G7 to freeze Russia out of international organisations and to cut it off from its gold reserves.
– Key figures around 1650 GMT –
New York – DOW: UP 0.5 percent at 34,535.29 points
London – FTSE 100: UP 0.1 percent at 7,467.38 (close)
Frankfurt – DAX: DOWN 0.1 percent at 14,273.79 (close)
Paris – CAC 40: DOWN 0.4 percent at 6,555.77 (close)
EURO STOXX 50: DOWN 0.2 percent at 3,863.39
Tokyo – Nikkei 225: UP 0.3 percent at 28,110.39 (close)
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 21,945.95 (close)
Shanghai – Composite: DOWN 0.6 percent at 3,250.26 (close)
Brent North Sea crude: DOWN 1.2 percent at $116.38 per barrel
West Texas Intermediate: DOWN 1.6 percent at $113.15 per barrel
Euro/dollar: DOWN at $1.0990 from $1.1013 late Wednesday
Pound/dollar: DOWN at 1.3183 from $1.3204
Euro/pound: UP at 83.37 pence from 83.36 pence
Dollar/yen: UP at 122.35 yen from 121.12 yen
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