LONDON – European stock markets closed lower on Tuesday as the United Arab Emirates announced its withdrawal from OPEC and investors awaited Washington’s response to its Iran peace plan.
The shocking announcement was a blow to the cartels that coordinate production among many of the world’s biggest oil producers, especially those in the Middle East.
Investor sentiment remained weak, with stock prices turning negative in afternoon trading. pan-european Stocks 600 ended the day down 0.3%, with all but a few sectors ending in the red.
Swiss pharmaceutical company busy with financial results for European companies Novartis Group operating profit fell 12% on an annual basis to $4.9 billion, up 0.7% after first-quarter earnings. This was lower than the $5.3 billion expected by analysts compiled by LSEG.
British energy giant blood pressure announced its first-quarter results on Tuesday, with profits for the quarter more than doubling and exceeding expectations. The company’s London-listed shares closed up 1.7% on Tuesday.
Barclays shares fell 0.3% after the British lender took a 200 million pound ($270 million) credit hit in the first quarter, due to the bank’s exposure to troubled real estate lender Market Financial Solutions.
The British lender on Tuesday reported first-quarter pre-tax profits of 2.81 billion pounds, up 3% from 2.72 billion pounds in the same period a year earlier. The CET1 ratio was 14.1%. The company also announced a £500m share buyback, following the completion of an ongoing £1bn program. Overall, Barclays plans to return more than £15bn of capital to shareholders between 2026 and 2028.
airbusalso reported first-quarter results to investors and closed 0.3% higher on Tuesday.
Investors will appreciate news that US President Donald Trump and his national security team have discussed Iran’s proposal to reopen the Strait of Hormuz once the US lifts its blockade and the war ends, White House press secretary Caroline Levitt confirmed on Monday.
The proposal would postpone negotiations on Iran’s nuclear program to a later date, Axios and the Associated Press reported earlier in the session.
It is unclear whether President Trump, who has vowed not to lift the blockade until the deal with Iran is “100% complete,” has accepted the offer that reportedly would end the two-month war. Oil prices rose slightly overnight as uncertainty remained over the outcome of the war.
In corporate news, German biotech giant Bayer went to the U.S. Supreme Court on Monday to end thousands of lawsuits against its herbicide Roundup.
Bayer acquired Roundup maker Monsanto for $63 billion in 2018, but has faced lawsuits in the years since the deal closed amid claims that glyphosate, an ingredient in the herbicide, causes health problems such as cancer.
The justices reportedly split after hearing arguments at Monday’s hearing in which Bayer announced its appeal of a Missouri state court’s $1.25 million judgment against a man who said his diagnosis of non-Hodgkin’s lymphoma was due to years of exposure to Roundup.
Activists from the Make America Healthy Again (MAHA) movement gathered outside the courthouse on Monday to protest against Bayer.
Bayer’s Frankfurt-listed shares fell 4.6% on Tuesday.
Global markets will also turn their attention to central banks this week, with the US Federal Reserve, European Central Bank and Bank of England all scheduled to hold important meetings as the war upends inflation and growth expectations.
Wednesday’s Fed policy decision could be Jerome Powell’s last meeting as chairman before Kevin Warsh is expected to take over in May. The Justice Department decided Friday to drop its criminal investigation into Powell, and Sen. Thom Tillis ended his bid to block Warsh’s confirmation.
The ECB and BoE both announced their latest monetary policy decisions on Thursday, and economists expect the central banks to keep benchmark interest rates unchanged at their respective meetings this month. However, central banks are expected to leave the door open to raising interest rates this year.
— CNBC’s Kevin Breuninger contributed to this market report.
