Stocks across Europe rallied before the war, with investors betting that early progress by US-led forces would lead to a swift conclusion, leaving the teetering global economy intact.
Germany’s DAX index and France’s CAC-40 index have both climbed around 20% since March 12, while Britain’s FTSE 100 benchmark index gained 18% as investors mopped up trashed financials and tech stocks.
The cash-starved insurance sector will remain in the spotlight with Thursday bringing annual figures from Munich Re and Swiss Re. Investors are on tenterhooks after German insurer Allianz announced a deeply discounted rights issue to fortify its battered cash reserves.
But there are hopes for solid results from the world’s fifth-largest retailer Metro on Tuesday, while analysts polled by Reuters predict Swedish fashion retailer Hennes & Mauritz is expected to post a 31% jump in its first-quarter profits on Wednesday.
Analysts said falling crude oil prices in the face of expectations of a swift end to the war could provide support for the market.
“A lower oil price is a key positive. It lowers costs for companies and it is a direct benefit to consumers,” said Richard Champion of Pavilion Asset Management in London, adding that the boost to European consumers was more muted than in the US, where taxation on gasoline is much lower.
But oil firms such as France’s Total Fina Elf , BP and Shell could suffer as slipping crude oil prices eat into their revenues.