European Stock Futures Down as Concerns Grow over US Banking Sector

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On Thursday, European stock markets are expected to open lower amidst increasing worries about a global economic slowdown and the health of the US banking industry. The banking sector remains in focus as shares in First Republic Bank (NYSE:FRC) tumbled 30% on Wednesday after revealing $100 billion in customer withdrawals last month, raising fears about its long-term viability. Bloomberg also reported that US bank regulators were considering downgrading their assessments of the bank, which would hinder its ability to borrow from the Federal Reserve.

The contagion effect is being felt overseas as Nomura (TYO:8604) stock fell 7% earlier today after reporting a 76% plummet in its quarterly profit, due to concerns over a banking crisis and slowing growth. However, Deutsche Bank (ETR:DBKGn) posted a better-than-expected 9% rise in first-quarter profit, while BBVA (BME:BBVA), Swedbank, and Nordea also reported larger than expected first-quarter net profits.

Pernod Ricard (EPA:PERP) reported disappointing sales in the third quarter, but the French spirits group remains confident of delivering a strong performance over the 2022/2023 full year. Earnings are also expected from Unilever (NYSE:UL), AstraZeneca (NASDAQ:AZN), WPP (LON:WPP), and J Sainsbury (LON:SBRY).

On the economic data front, Europe is due to release some Eurozone sentiment indexes, consumer and business sentiment readings for Italy, along with retail sales and the jobless rate in Spain. Oil prices edged higher Thursday, but concerns over slowing economic growth continue to impact demand. Both US crude and Brent contracts are on course to post losses of almost 4% this week, close to a one-month low, having erased all the gains made on the back of a surprise production cut by the Organization of Petroleum Exporting Countries and allies at the start of this month.

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