European shares are expected to follow their Asian counterparts lower on Tuesday, as political uncertainty in Greece and volatility in the oil market weigh on global investor sentiment
Investors will be watching developments in Greece after the country’s parliament failed to elect a president on Monday, triggering an general election set for January 25 that an anti-austerity party could win. The move caused bond yields to spike not only in Greece but also in Italy and Spain. Whereas U.S. treasury prices rose as investors looked to a perceived safe haven following the vote. Bond prices move inversely to yields.
Anxiety over oil markets and political uncertainty in Greece dragged most Asian indices lower on Tuesday, with Tokyo, Seoul and Hong Kong hitting fresh lows. Wall Street’s mixed finish overnight and turmoil in the oil markets did little to lift trading sentiment.
Brent oil extended losses into a fourth session on Tuesday, with prices near to a more-than five-year low above $57 per barrel, despite ongoing output disruptions in Libya.
President Nicolas Maduro of Venezuela, which is a member of the Organization of Petroleum Exporting Countries (OPEC), said on Monday that the country’s petroleum export price has plunged by half during the second half of 2014 to $48. Speaking on state TV, Maduro blamed the oil price decline on the U.S., saying the country was aiming to harm Russia and Venezuela, Reuters reported late on Monday.
In other news, the search for the missing AirAsia QZ8501 flight continues. Countries around Asia have joined the search for the plane that was carrying 162 people and is presumed to have crashed. Early Tuesday, Indonesian television showed footage of objects in the water, which are believed to be part of the missing AirAsia jet.
In the U.K., a healthcare worker has been diagnosed with Ebola a day after flying home to Glasgow, Scotland, from Sierra Leone, the Scottish government said on Monday.
On the data front, Spain releases monthly inflation and retail sales figures, Italian business confidence data is published and in the U.K., the Nationwide House Price index is released. The euro zone also releases details of money supply in the region.