US stocks open higher, gas prices spike on pipeline delay

US stocks open higher
Men work at the construction site of the Nord Stream 2 gas pipeline in Lubmin, northeastern Germany in March 2019. Germany’s energy regulator suspended the approval process for Russia’s Nord Stream 2 gas pipeline on November 16, 2021. (Photo: AFP)
LONDON — US equities followed European indices higher at the open Tuesday on persistent recovery hopes, as gas prices surged after Germany delayed approving a key pipeline from Russia.اضافة اعلان

Meanwhile the euro fell against the pound and dollar after European Central Bank President Christine Lagarde said she would not “venture” into speculation over interest rate rises.

And bitcoin dipped below the $60,000 mark to a two-week low before recovering slightly.

A higher-than-expected increase in US retail sales in October data released on Tuesday may have reinforced the positive mood in stock markets.

Financial players were “caught between two strong counter-forces, a strong earnings season providing the bullish case and a long list of downside risks -- most notably inflation and interest rates — which continue to weigh on sentiment,” OANDA analyst Craig Erlam said.

Lagarde’s remarks brushing off potential rate rises in 2023 followed debate over higher inflation in the single currency bloc, while analysts suggested the Bank of England could hike as soon as December based on surging price growth and higher employment.

BoE Governor Andrew Bailey on Monday told British lawmakers that he felt “very uneasy” about high inflation, ahead of the latest official print on the UK consumer prices index due Wednesday.

Global stock markets have enjoyed a long run of healthy gains — with many hitting record or multi-year highs — thanks to ultra-loose central bank monetary policies put in place at the start of the pandemic.

But with the recovery on track and people returning to a semblance of normality, inflation is surging to levels not seen in decades owing to a spike in demand and supply chain snarls — forcing policymakers to turn off the taps.
Still, for now, investors remain optimistic that officials are on the right track, with Wall Street’s three main indices as well as markets in Europe sitting at or just below all-time highs.

In Germany, a regulator said it was temporarily halting the approvals process for Russia’s controversial Nord Stream 2 pipeline, seen by Berlin as guaranteeing energy supply but by the country’s allies as a potential tool for blackmail by Moscow.

The certification procedure “will remain suspended until the main assets and human resources” have been transferred from the Nord Stream 2 parent company to its German subsidiary, the energy regulator said.

The move sent natural gas prices surging as much as 12 percent, falling back to add around 5.5 percent in the afternoon.

Late Monday, virtual talks between US President Joe Biden and China’s Xi Jinping ended with both sides — representing the world’s two biggest economies — trading strong warnings on the future of Taiwan, the self-governing democracy claimed by Beijing.

Relations between the US and China had plummeted during the presidency of Donald Trump, who launched a trade war with Beijing.

Biden on Monday raised “concerns” with China over the wider issues of human rights abuses and mass repression against the Uyghurs in the northwest region of Xinjiang.

“The virtual meeting between President Biden and President Xi went off as expected, which is to say it didn’t produce any market-moving developments. It doesn’t hurt, though, to know that the line of communication between these two leaders remains open,” said analyst Patrick O’Hare.

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