Europe open: Ukraine tensions hit shares; Kingspan out of favour

European shares opened lower on Monday as investors continued to fret about the pace of interest rate rises and growing US/Russian tensions over Ukraine.

The pan-European STOXX 600 index slipped 0.35% in early deals with Asian stocks closing lower.

Investors are also eyeing a possible Russian attack on Ukraine as the US State Department pulled out family members of its embassy staff in Kyiv.

“The Federal Reserve meeting later this week is expected to confirm the fears which investors have been harbouring so far this year, namely that that apart from an acceleration of tapering, interest rate cards are also likely to pepper the remainder of 2022,” said Interactive Investor head of markets Richard Hunter.

“The current consensus is for an initial hike in March, followed by a further two or three rises which could take the rate to 1% by year end. While the moves are increasingly necessary given relatively rampant inflation, they also bring the likelihood of dampening earnings prospects.”

In equity news, shares in building cladding maker Kingspan fell more than 6% as the UK government threatened to restrict trading unless the industry paid to fix dangerous housing in the wake of the 2017 Grenfell tower fire which killed 72 people.

Renault gained 3.6% as the French carmaker, Japan's Nissan and Mitsubishi Motors reportedly planned to triple their investment to jointly develop electric vehicles.

Unilever climbed 4.6% after reports that activist hedge fund Trian Partners, owned by Nelson Peltz, had built a stake in the consumer goods company.

Vodafone was up 4% on a report the company and Iliad were in talks to strike a deal in Italy that would combine their respective businesses.