LONDON – European stocks are expected to open a little higher on Wednesday, reflecting a more cautious and uncertain tone in global markets.
The London FTSE opened 7 points higher at 7,102, the German DAX 16 points higher at 15,512, the French CAC 40 rose 10 points at 6,503 and the Italian FTSE MIB lost 4 points at 25,110, according to IG.
The more cautious opening expected in Europe reflects mixed sentiment in other countries overnight; Asia Pacific stocks were mixed in Wednesday trading after losses on Wall Street, with the S&P 500 ending its seven-day winning streak in the previous session.
Investors may fear that the economy is nearing its peak and that a correction is imminent. In addition to the complacency of the market, the combination of profit margin pressures, fears of inflation, Fed tapering and possible higher taxes could contribute to an eventual decline, market strategists say.
In the US, recovery-focused stocks like Caterpillar, Chevron and JPMorgan Chase retreated on Tuesday, while big tech stocks like Amazon, Apple and Alphabet rose. Energy stocks took a hit after West Texas Intermediate crude oil futures reached their highest level in more than six years before falling into negative territory.
Oil prices were up slightly on Wednesday afternoon in Asia after the slump on Tuesday, with the international benchmark Brent crude oil futures rising slightly to $ 74.55 a barrel. US crude oil futures rose 0.12% to $ 73.46 a barrel.
The volatility in the oil market follows an indefinite postponement of talks between OPEC and its oil-producing allies after the group failed to reach an agreement on its production policy for August and beyond.
On the data front, Russia publishes June inflation data and France publishes May trade data. There will be no major earnings releases on Wednesday.
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– CNBC’s Tanaya Macheel contributed to coverage of this story.