European Markets Stalled; Hormuz Concerns Resurface
European stock markets traded flat on Monday (August 10) following strong gains last week. The Stoxx Europe 600 index held near all-time highs, while Germany’s DAX, France’s CAC 40, and the UK’s FTSE 100 remained relatively stable.
Markets continued to draw support from weak US labor data released on Friday. A drop in Nonfarm Payrolls led investors to scale back expectations for Federal Reserve interest rate hikes, helping to maintain positive sentiment toward risk assets.
However, rising oil prices acted as a drag. Brent crude rose approximately 0.6% to around US$84.04 per barrel, raising concerns that energy and production costs for European companies could rise again.
Oil prices were driven up by uncertainty surrounding the Strait of Hormuz. Iran stated that a draft agreement with Oman regarding the shipping route has reached its final stages, though the full opening of the strait remains contingent on the United States meeting certain conditions.
Investors are also awaiting upcoming US economic data—particularly inflation figures—to gauge the direction of Federal Reserve policy. On the corporate front, Volkswagen drew attention as the Porsche and Piëch families ramped up pressure on shareholders to back a major restructuring of the company.
Newsmaker Analysis: European markets retain solid fundamentals following last week's rally and the easing of US rate-hike expectations. However, rising oil prices driven by Hormuz-related uncertainty could pose a new headwind. Should energy costs continue to climb, cost pressures and inflation could potentially cap the rally in European stocks. (asd)
Source: Newsmaker.id
