European stocks fall as Nord Stream shutdown drags on

By on September 5, 2022 0

The DAX chart of the German stock price index is pictured on the stock exchange in Frankfurt, Germany, August 30, 2022. REUTERS/Staff

Join now for FREE unlimited access to

  • German stocks look at worst day in two months
  • Utilities plummet during extended Nord Stream 1 shutdown
  • ECB meeting expected on Thursday
  • Energy shares among rare winners

Sept 5 (Reuters) – European stocks fell on Monday after Russia extended a halt to gas flows on a major pipeline to Europe, sparking concerns about soaring energy prices and shortages winters in the region.

Europe’s STOXX 600 index (.STOXX) fell 1.7% in the first hour of trading, while Germany’s DAX index (.GDAXI) fell 3.1%, eyeing its biggest decline ever. as a percentage over one day in two months.

German utilities, including Uniper (UN01.DE), RWE (RWEG.DE), E.ON (EONGn.DE) and PNE (PNEGn.DE) fell between 2.9% and 10%.

Join now for FREE unlimited access to

Gazprom (GAZP.MM) announced on Friday evening that the main gas pipeline to Germany would remain closed indefinitely, against expectations of a restart on Saturday after three days of maintenance work.

The Kremlin blamed European politicians on Sunday for keeping the main gas pipeline closed, saying their economic sanctions had hampered pipeline maintenance. Read more

Energy ministers from EU countries are due to meet on September 9 to discuss options to curb soaring energy prices, including gas price caps and emergency credit lines for energy market players, according to a document seen by Reuters.

“It had looked earlier in the day that (the pipeline) would reopen last weekend, but some thought the late news was a sign that Russia was using its full leverage on Europe,” Jim said. Reid, Deutsche Bank strategist.

“Europe has done a very good job over the past two months, increasing gas storage levels and increasing imports from elsewhere, but if there is no more gas flow in from Russia, we’re probably hitting and going in terms of getting all winter without noticeable restrictions/rationing.”

The STOXX 600 watched what could be another round of selling pressure this week, as record high inflation and heightened bets of a sharp interest rate hike by the European Central Bank also added to the tide. gloom.

Yields on Italian government bonds drove eurozone bonds higher on Monday, while Europe’s benchmark gas contract climbed 30% at the open.

Separately, data showed that Germany’s services sector contracted for a second straight month in August as domestic demand came under pressure from soaring inflation and shaky confidence. Read more

Energy stocks (.SXEP) were among the few winners in Europe, last rising 1.2% amid rising oil prices.

Zurich Insurance Group (ZURN.S) has announced its intention to exercise its option to redeem 450 million pounds ($515.93 million) of subordinated debt. Its shares fell 1.1%.

Join now for FREE unlimited access to

Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty

Our standards: The Thomson Reuters Trust Principles.