Europe open: Oil prices, inflation fears hit shares; Idorsia tanks
European shares opened lower on Wednesday as oil prices rose in response to Saudi Arabia's decision to extend its voluntary supply cut and inflationary fears persisted.
The pan-European Stoxx 600 index was down 0.59% in early deals with all major bourses in the red after a weaker session on Wall Street and a mixed markets in Asia.
‘’The downbeat mood on the markets is continuing, with little to lift sentiment in sight, as oil prices stay elevated and inflationary fears are pushed back up," said Hargreaves Lansdown analyst Susannah Streeter.
Saudia Arabia on Tuesday said it was cutting supply by 1 million barrels a day until the end of the year, with fellow heavyweight Russia also announcing a smaller cut of 300,000.
"Energy prices are big inflationary drivers, and just at the time when the price spiral appears to be moving more obediently downwards, high crude prices could cause upset," Streeter added.
In equity news, shares in Idorsia fell sharply as the Swiss drug maker said it was buying back the rights to its hypertension treatment from Janssen Biotech.
UK housebuilder Barratt fell as it reported a fall in annual profits, cut its dividend and said there would be no share buyback this year as higher borrowing costs hit mortgage affordability.
Stationery and books retailer WH Smith was weaker despite saying that full-year figures will be in line with expectations as strong trading at its airport and train station locations offset a weak performance on the high street.
Polish parcel locker company InPost led the gainers with an 8.5% rise after reporting a higher core profit margin for the second quarter, driven by improved profitability in Poland and smaller losses in Britain and Italy.
Reporting by Frank Prenesti for Sharecast.com