European stock markets traded lower Tuesday, weighed by losses in Asia on fresh Chinese regulatory fears, but BHP Billiton soared after confirming the spin-off of its crude assets.
At 3:45 AM ET (0745 GMT), the DAX in Germany traded 0.4% lower, the CAC 40 in France fell 0.4% and the U.K.’s FTSE 100 dropped 0.1%.
BHP stock soared over 8% after the world’s biggest listed miner confirmed it will sell its petroleum assets to Woodside Petroleum after it posted its best annual profit in nearly a decade. The spin-off, which ends BHP’s relationship with fossil fuels, improves its profile with investors focused on Environmental, Social and Governance (ESG) factors, while also jettisoning one of its least profitable operations.
Staying in the sector, Glencore stock fell 0.9% after the mining giant acquired a stake in U.K. battery maker Britishvolt, a company which plans to produce batteries for electric vehicles.
European markets received a weak handover from Asia, with the Hang Seng index in Hong Kong dropping 1.7% after Chinese regulators issued a set of draft regulations for the internet sector on Tuesday, the latest move in a crackdown on the country’s powerful tech companies.
The directives seek to ban unfair competition while restricting the use of user data, and resulted in a number of the important Hong Kong-listed internet stocks falling sharply.
This follows Chinese economic data on Monday pointing to a slowdown in growth at the region’s main economic driver due to floods and rising cases of the highly-transmissible delta Covid variant and the measures taken to contain it, while the turmoil in Afghanistan is also denting investors’ confidence.
Turning to economic data, the U.K. employment situation picked up in July as the country reopened fully from the Covid-induced lockdowns. The claimant count dropped 7,800, while the unemployment rate fell to 4.7% in June.
The second reading of the second-quarter GDP release for the Eurozone is due later in the session, and should confirm the strong growth of 13.7% of the preliminary estimate.
Over in the U.S., the retail sector is likely to be in focus Tuesday with U.S. giants Home Depot and Walmart set to release their second-quarter earnings before the market opens, while the July retail sales figure is expected to show a slowdown in consumer spending.
Elsewhere, oil prices edged lower Tuesday, struggling to find support after Monday’s sharp losses on Covid-related fears for global demand.
The Energy Information Administration also noted Monday, in its monthly report, that U.S. shale oil output is expected to rise to 8.1 million barrels per day in September, the highest since May 2020. This puts the weekly crude inventory data by the American Petroleum Institute, due later Tuesday, firmly into focus.
By 3:45 AM ET, U.S. crude futures traded 0.5% lower at $66.73 a barrel, after dropping 1.7% Monday, while the Brent contract fell 0.5% to $69.19, after falling 1.5% during the previous session.
Additionally, gold futures rose 0.3% to $1,795.65/oz, while EUR/USD traded 0.1% lower at 1.1769.