European stocks drop at open as euro nears dollar parity

Europe’s main stock markets retreated at the open Tuesday, as the euro came ever closer to parity with the dollar, on growing expectations that the eurozone would fall into recession.

Frankfurt’s DAX index slid 0.6 percent to 12,752.36 points and the Paris CAC 40 retreated 0.5 percent to 5,965.66.

Outside the eurozone, London’s FTSE 100 index lost 0.3 percent to 7,173.36 points.

The euro earlier slumped to $1.0006 as a reduction in Russian gas supplies to Europe heightened recession fears.

Russian energy giant Gazprom on Monday begin 10 days of maintenance on its Nord Stream 1 pipeline — with Germany and other European countries watching anxiously to see if the gas comes back on.

With relations between Russia and the West at their lowest in years because of the invasion of Ukraine, Gazprom may not reopen the valves, according to analysts.

The European single currency is also under pressure from the Federal Reserve hiking US interest rates more aggressively than the European Central Bank.

Central banks are increasing borrowing costs in a bid to tame decades-high inflation, which has been fuelled by soaring energy prices.

Oil and gas prices have rocketed this year after economies reopened from Covid lockdowns and following the invasion of Ukraine by major energy producer Russia.