Peter Nurse 

Investing.com. European stock market are likely to open higher Friday. This is due to the abrupt reversal of Wall Street overnight. It’s also because investors take in the long-term implications of sanctions that the U.S. and its allies imposed on Russia following its invasion of Ukraine.

2. AM ET (0700 GMT): The German contract traded 0.1% lower, while France’s contract rose 1.5%. Meanwhile, the U.K contract rose 1.1%.

The European equity markets ended sharply lower on Thursday as the and all other indices fell almost 4% after Russian President Vladimir Putin approved an invading of Ukraine. He also unleashed troops, tanks and missiles against Ukraine.

Wall Street shares also plunged initially. However, the dramatic rebound occurred late in the day when U.S. President Joe Biden and his G-7 allies announced new sanctions targeting Russia’s ability in international currencies. They include actions against state-owned banks as well as measures to stop the flow of money into the country.

The new measures did not include a disconnection of Russia from SWIFT or a target for its oil and natural gas exports. These moves could have severe consequences on Western economies, which are still recovering from the Covid-19 pandemic.

Still, any rallies could be short-lived, with Russia’s military action in Ukraine carrying huge risks for a world economy. 

“This conflict is going to be a protracted issue and add to global inflationary pressures that will keep central banks on track for tightening,” said Kyle Rodda, an analyst at IG Markets.

The earnings season continues elsewhere in Europe. German chemical giant BASF (DE) is likely to dominate the news after it predicted a drop in operating earnings in 2022, as the supply chain of its chemicals remains susceptible to disruptions.

Swiss Re (OTC:) reported a smaller-than-expected full-year profit in 2021, with the reinsurance company experiencing a partial rebound from the coronavirus pandemic despite big claims from natural disasters.

Holcim (SIX): The world’s largest cement manufacturer reported a better than expected recurring operating profit in the fourth quarter 2021. It also said that it expects growth to continue across all regions of the country this year.

The new sanctions imposed by America and its allies on Russia after the invasion of Ukraine caused oil prices to rise Friday. This raises concerns that the world’s energy supply will be affected.

Although an U.S. official was quoted as saying its measures “are not targeting and will not target oil and gas flows”, the sanctions on Russia’s banks and state-owned enterprises are likely to impede the country’s ability to do business in major currencies.

Russia is the second largest oil producer in the world and the biggest supplier to Europe with 35%. 

The futures closed 1.9% lower at $94.56/barrel by 02:01 ET. Contracts rose 2.2%, to $97.47.

Brent touched $105 on Thursday before gaining some ground by close trade. Crude oil prices rose to $100 per barrel for the first-time since 2014

Also, the price of gold fell 0.4% at $1,919.50/oz while it traded 0.1% higher to 1.1202.