European stocks open lower as oil slumps; UK, EU agree on Brexit divorce draft

Traders will be keeping a close eye on moves in oil prices on Wednesday after crude plunged as much as 7 percent in the previous session on the back of fears around oversupply and weakening global demand.

As of 1 a.m. ET, Brent crude was seen trading half a percent lower to $65.15 a barrel while U.S. West Texas Intermediate crude fell 0.74 percent to $55.28. The rout will likely put pressure on oil firms’ share price during the trading session Wednesday.

The Italian government on Wednesday stuck to its contested 2019 deficit target of 2.4 percent of gross domestic product (GDP), defying the European Union’s call for Rome to revise fiscal targets. Deputy Prime Minister Matteo Salvini warned the EU against issuing fines against Italy over its budgetary plans.

Brexit will likely be another area of focus for investors Wednesday after news of a key breakthrough between Britain and the EU on a divorce deal. Negotiators on neither side have reportedly agreed to a draft deal late Tuesday; British Prime Minister Theresa May will meet with her cabinet on Wednesday to get her ministers on side.

In corporate news, the European Commission sent a statement of objections to Siemens and Alstom over their proposed rail merger on Tuesday. The two firms confirmed the news to CNBC and said they would respond to the objections from EU’s executive body. Alstom is set to report its first-half results on Wednesday.

Other corporates slated to post earnings include Maersk, E.On and Wirecard.

Meanwhile, in data, key German gross domestic product (GDP) growth figures will be released Wednesday, amid fears of a slowdown in the country’s economy.

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