Key facts
- European chemical companies' Q2 earnings are expected to show a temporary boost from Middle East conflict-driven supply disruptions.
- Investors are concerned about weak underlying demand and competition from Asian producers.
- Several companies, including Brenntag, BASF, and Evonik, have recently increased their full-year profit forecasts.
- Germany's chemical industry association VCI cautioned that the current price support might be short-lived.
- Brent crude prices surpassed $90 a barrel due to escalating U.S.-Iran conflict.
European shares edged lower as escalating U.S.-Iran conflict drove oil prices higher, stoking inflation concerns ahead of corporate earnings. Brent crude surpassed $90 a barrel for the first time in a month due to reports of tankers being immobilised in the Strait of Hormuz.
Energy stocks rose 1.4%, while travel and leisure stocks fell 1.3%, with Ryanair leading losses after reporting a 34% drop in first-quarter profit due to higher fuel costs. Tech stocks saw a modest gain of 0.4% ahead of U.S. Big Tech earnings.
European chemical companies' second-quarter earnings are expected to show a temporary boost from conflict-driven supply disruptions. However, concerns remain over weak underlying demand and increasing competition from Asian producers. While some companies like Brenntag, BASF, and Evonik have raised full-year profit forecasts, Germany's chemical industry association VCI cautioned that the current price support might be short-lived. Results from Lanxess, Clariant, and Wacker Chemie will be closely watched for signs of sustained growth.
The European Central Bank is widely expected to hold interest rates steady at its upcoming meeting.