European shares opened higher on Tuesday while oil prices retreated, as investors weighed fresh diplomatic efforts aimed at ending the conflict in Ukraine alongside anticipation of central bank signals from the upcoming Jackson Hole symposium. The pan-European STOXX 600 gained 0.1%, with the UK’s FTSE 100 and Germany’s DAX also edging up, while France’s CAC 40 added 0.2%. Traders said optimism over potential peace talks, coupled with caution ahead of central bank speeches, drove early market sentiment.
The euro strengthened slightly against the dollar after Ukrainian President Volodymyr Zelenskiy announced that security guarantees for his country could be finalized within 10 days, following discussions with U.S. President Donald Trump and European leaders. NATO Secretary General Mark Rutte described recent meetings as “very successful,” though a recent U.S.-Russia summit in Alaska yielded no breakthrough. Meanwhile, Trump said he had spoken with Russian President Vladimir Putin and was preparing a trilateral summit with Zelenskiy to accelerate peace negotiations.
Despite optimism on the diplomatic front, European defense stocks slipped, with the sector index falling 1.3%. Swedish military contractor Saab AB tumbled 3.7%, reflecting investor concerns that reduced geopolitical tensions could dampen defense spending. Oil prices also moved lower as traders considered the possibility that an eventual ceasefire and easing of sanctions could increase Russian crude supplies. U.S. crude dropped 0.9% to $62.88 per barrel, while Brent crude slipped 0.8% to $66.07.
Elsewhere, Asian markets delivered mixed signals. MSCI’s Asia-Pacific index outside Japan fell 0.2%, while Japan’s Nikkei hit a record at the open before retreating 0.4% amid a sharp selloff in SoftBank shares. Investors were also cautious ahead of the Federal Reserve’s annual Jackson Hole gathering, where Chair Jerome Powell is expected to outline the economic outlook and policy direction. Analysts suggested that a dovish tilt could support equities but weigh further on the U.S. dollar.
In currency markets, the dollar eased 0.2% to 147.64 yen, while the euro climbed 0.1% to $1.1670. The dollar index held steady after modest gains in the previous session. Meanwhile, spot gold rose 0.3% to $3,339.54 an ounce as investors sought safety amid uncertainty over central bank policies and global inflation trends. Market watchers say this week’s Jackson Hole symposium will be pivotal in shaping risk sentiment across equities, bonds, and commodities.
Source: Reuters