European stocks are seen opening higher on Wednesday after U.S. President Joe Biden announced a ban on U.S imports of Russian oil in consultation with European allies, who rely heavily more heavily than the U.S. on Russian energy.
The U.K. said it would phase out the import of Russian oil and oil products by the end of 2022. The EU didn’t follow suit and said the bloc could become fully independent of Russian gas, oil and coal by 2030.
Analysts said the U.S. and U.K. ban will be far disruptive to global markets than a full international embargo.
Meanwhile, Ukraine President Volodymyr Zelensky said he is no longer pressing for NATO membership for Ukraine, a delicate issue that was one of Russia’s stated reasons for invading its pro-Western neighbor.
In another apparent nod aimed at placating Moscow, Zelensky said he is open to “compromise” on the status of two breakaway pro-Russian territories — Donestk and Luhansk.
As Russia intensifies its attack of Ukraine’s capital Kyiv, U.S. beverage giants PepsiCo and Coca-Cola, along with fast food major McDonald’s and coffeehouse chain Starbucks all announced that they were temporarily suspending their business in Russia.
Fitch downgraded Russia’s sovereign rating further into junk and said a bond default is “imminent”. Russia’s central bank has decided to keep stock market trading on the Moscow Exchange largely suspended again today.
Asian stocks were broadly higher, though Chinese and Hong Kong markets fell sharply after data showed China’s consumer prices rose 0.6 percent in February from the previous month and producer prices gained 0.5 percent. South Korean markets were closed for a presidential election.
Crude oil prices climbed nearly 2 percent in Asian trade, while gold traded flat after climbing to a 19-month peak in the previous session. The dollar and U.S. Treasury yields were higher amid concerns over soaring inflation and tightening financial conditions.
U.S. stocks ended lower for the fourth straight session overnight as President Joe Biden officially announced a U.S. ban on Russian imports of oil and energy, a development analysts warned could result in higher inflation and slower economic growth.
The Dow dropped 0.6 percent, the tech-heavy Nasdaq Composite eased 0.3 percent and the S&P 500 dipped 0.7 percent.
European stocks ended mostly lower on Tuesday, giving up sharp early gains on reports the European Union is mulling a joint bond sale to fund energy and defense spending.
The pan European Stoxx 600 declined half a percent. The German DAX finished marginally lower and France’s CAC 40 index shed 0.3 percent while the U.K.’s FTSE 100 ended flat with a positive bias.
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