European stocks were set to rise on Tuesday, gaining ground for the sixth session in a row and tracking a rally on Wall Street where both the Dow and S&P 500 ended at record highs.
At 0709 GMT, futures for Euro STOXX 50, for Germany’s DAX and France’s CAC were up 0.3 per cent.
Shares in French lender Societe Generale will be in focus after the Wall Street Journal reported that the bank might have to push back its profitability targets in Russia by several years due to the country’s financial crisis.
Western companies are curtailing investments in Russia, repatriating funds and talking with their banks about currency hedges to protect profits from the falling rouble and worsening growth outlook.
Shares in energy companies will also be eyed on Tuesday, with oil prices edging up on expectation of firm US economic data later in the day.
Will the US' 3rd quarter GDP be higher than the 2nd Q's growth of 4.6%? Market is waiting for the US Commerce Department to release the data
— Rajalakshmi Nirmal (@crajalakshmic)
>December 23, 2014Trading was light, however, as traders begin closing their 2014 positions ahead of Christmas and the New Year.
Energy index
The MSCI World energy sector index has tumbled 30 per cent since June, wiping out about $1 trillion in the market value of oil and gas shares, roughly the size of the combined annual GDP of Saudi Arabia and Qatar, data from Thomson Reuters Datastream shows.
The slump in crude oil prices, which are down by nearly half in six months, has also been pummelling the bonds of energy companies and sending shockwaves through the high-yield credit market.
Late on Monday, credit ratings agency Standard & Poor’s had lowered to ‘negative’ its outlook for Total, BP and Royal Dutch Shell, citing a “dramatic deterioration in the oil price outlook’’.
However, most fund managers and analysts see weakening oil prices as positive in the medium term for economic growth and corporate earnings.
Analysts have said it will lower fuel costs and leave consumers with more disposable income, and will keep downward pressure on inflation, making an imminent rate move by the US Federal Reserve much less likely.