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Monday, September 26, 2022
Stocks & Shares

Global stocks slump as Europe faces squeeze on gas supplies

Global stocks

Markets were roiled by Russian energy giant Gazprom’s announcement Friday that a suspension of gas supplies through the Nord Stream 1 pipeline would be extended indefinitely

Global stock markets sank Monday as Europe faced a new squeeze on Russian gas supplies.

London and Frankfurt opened lower. Tokyo, Hong Kong and South Korea fell while Shanghai gained. Oil prices rose more than $2 per barrel while the euro edged lower.

Markets were roiled by Russian energy giant Gazprom’s announcement Friday that a suspension of gas supplies through the Nord Stream 1 pipeline would be extended indefinitely. That adds to shortages in Germany and other economies.

In early trading, the FTSE 100 in London lost 1.1% to 7,198.73 and the DAX in Frankfurt tumbled 3.2% to 12,628.44. The CAC 40 in France fell 2% to 6,047.28.

Gazprom’s announcement puts European stocks under heavy pressure, said Chris Turner of ING in a report.

European economies face gas shortages after their governments agreed to wind down purchases from Russia to punish the Kremlin for invading Ukraine.

Last week, state-owned Gazprom announced a three-day suspension of gas supplies through Nord Stream 1 due to urgent maintenance work.

On Friday, the company said that would be extended indefinitely. Russia already has reduced supplies to countries that sided with Ukraine.

Also Friday, U.S. government data showed hiring slowed in August but wages rose sharply. Forecasters said the Federal Reserve might see that as evidence more interest rate hikes are needed to bring down inflation that is at a four-decade high.

Markets relinquished early optimism for a sense of foreboding, said Tan Boon Heng of Mizuho Bank in a report.

On Wall Street, the S&P 500 future was off less than 0.1%. That for the Dow Jones Industrial Average gained less than 0.1%.

The Dow also fell 1.1% on Friday after the Labor Department reported the U.S. economy added 315,000 jobs in August. That was down from July’s 526,000, but average hourly pay jumped by an unusually wide margin of 5.2% compared with a year earlier.

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