Investing.com – European stock markets are expected to open higher Wednesday, but gains are likely to be limited ahead of the release of key Eurozone growth data.
European stocks have benefited of late from stronger-than-expected corporate earnings, but growth concerns remain a dominant theme, offering potential risks ahead for profits that could sap the market’s momentum.
The final reading of Eurozone Q2 GDP is due later in the session, and while preliminary data showed faster than expected growth, this could be the economy’s last hurrah as soaring energy prices weigh on consumer’s discretionary spending.
Earlier in the session, U.K. consumer prices rose by 10.1% in the 12 months to July, more than the 9.8% expected and at a new 40-year high – a further acceleration from the annual 9.4% rise in June.
The inflation rate is moving closer to the 13.3% peak the Bank of England forecast for October, while warning that the country faces a deep and prolonged recession.
In corporate news, Uniper (ETR:UN01) is likely to be in the spotlight after the German energy company, which secured a 15 billion euro bailout last month, unveiled a net loss of more than 12 billion euros ($12.2 billion) for the first half, partly blaming lower Russian gas supplies that forced it to buy at much higher prices elsewhere.
Oil prices rose Wednesday, bouncing from six-month lows after a bigger-than-expected drop in U.S. crude inventories reduced concerns over waning demand at the world’s largest consumer.
Crude stocks fell by about 448,000 barrels for the week ended Aug. 12, according to data from the industry body American Petroleum Institute, while gasoline inventories fell by about 4.5 million barrels.
Investors now await the official data from the Energy Information Administration, due later in the session, for confirmation.
Also of interest will be any more news on the talks to revive the 2015 Iran nuclear deal, with both Iran and the United States studying a proposal from the European Union, which could potentially remove sanctions on Iranian oil exports.
By 02:00 ET, U.S. crude futures traded 1.3% higher at $87.61 a barrel, while the Brent contract rose 1.1% to $93.38. Both contracts fell around 3% on Tuesday, its third straight losing day, touching their lowest levels since early February.