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European markets as January trading comes to an end

LONDON – European equities are expected to open higher on Monday, the last trading day in January, as investors keep an eye on political developments between Russia and Ukraine as well as oil prices.

The UK FTSE index is seen opening 46 points higher at 7,516, Germany’s DAX up 168 points at 15,492, France’s CAC 40 up 76 points at 7,073 and Italy’s FTSE MIB up 280 points at 25,789, according to data from IG.

The higher opening level expected in Europe comes after the major Asian indices jumped overnight, with the Nikkei 225 in Japan rising 1.47% in afternoon trading, while the Topix index rose 1.19%. The markets in Hong Kong and Singapore closed early Monday ahead of the Lunar New Year holiday.

Official data released on Sunday showed that growth in Chinese manufacturing activity slowed in January. The country’s official purchasing managers’ index for manufacturing for January was 50.1, just above the level of 50, which separates growth from decline. A private study published over the weekend showed that Chinese manufacturing activity declined in January.

Meanwhile, US stock futures were higher in overnight trading on Sunday as investors prepared for the final trading day of what could be the worst month for the S&P 500 since March 2020. Markets have been plagued by volatility in January as investors worry about inflation and tenders. chain problems and the forthcoming interest rate hikes from the Federal Reserve.

The Fed indicated last week that it is likely to raise interest rates for the first time in more than three years to combat historically high inflation. Markets are now pricing five-quarter percentage point rate hikes in 2022 with the first in March.

Investors in Europe are keeping an eye on developments between Russia and Ukraine with the UN Security Council to meet on Monday to discuss ongoing tensions between neighbors amid a build-up of troops on Russia’s border with Ukraine.

Earnings come from Ryanair on Monday, and data releases include preliminary quarterly GDP data (gross domestic product) for the euro area and preliminary January January data from Spain and Germany.

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– CNBC’s Maggie Fitzgerald and Eustance Huang contributed to this market report.

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