Europe open: Shares edge lower as Polymetal shines on guidance update

European shares fell at the open on Wednesday as investors paused for breath after gains earlier in the week to monitor Russia-Ukraine peace talks.

The pan-European Stoxx 600 index was down 0.54% in early deals with only London’s FTSE 100 bucking the trend as the energy-heavy index showed gains for majors such as BP, Shell, Glencore, Anglo American and BHP.

“Oil is attempting to stage a rebound amid the prospect of fresh Western sanctions against Russia, potentially further tightening an already fragile outlook for supply,” said Victoria Scholar, head of investments at Interactive Investor.

“With price action swinging between gains and losses this week, the market is attempting to weigh up the seriousness of peace talks between Russia and Ukraine alongside China’s policy response to its latest Covid-19 outbreak against the possibility of fresh Russian sanctions, Kazakhstan’s pipeline outage, falling US crude stockpiles and OPEC+’s expected plans to only modestly up supply at its meeting this week.”

Germany initiated an emergency gas plan after Russia president Vladimir Putin threatened to cut supplies if payments are not made in roubles in an attempt to prop up the sanctions-hit currency.

The German economy minister Robert Habeck urged firms and consumers to reduce energy consumption wherever possible but said there was currently no supply shortage. Habeck said the country was monitoring flows with market operations.

On the war front, Russia claimed it was scaling back operations about Kyiv in an apparent offering to make progress on peace talks. However, Ukraine officials were sceptical of Moscow's motives.

In other equity news, shares in pharma giant Roche fell after it said its drug to treat small cell lung cancer failed to meet its targets in a late-stage trial.

Ericsson shares fell 0.6% after investors publicly rebuked Chief Executive Borje Ekholm and the telecom equipment maker's board over a scandal involving potential payments to Islamic State.

Polymetal shares soared again, up 18% as the Russia-focused gold miner maintained production guidance and said it had not been affected by sanctions on Moscow over its invasion of Ukraine.