Investors worry about the region's economic outlook and central banks continue to combat inflation at high levels.

As investors worry about the region's economic outlook and central banks continue to combat inflation at high levels, European stock markets open Tuesday's trading session slightly lower.

Tuesday's market is characterised by a risk-off mood, with European equities expected to follow Wall Street's negative close. This is because the United States services sector activity unexpectedly increased in November, raising concerns that the Federal Reserve may continue to aggressively tighten monetary policy.

According to ECB Chief Economist Philip Lane, interest rates will need to be raised several more times to control price pressures. Back in Europe, the European Central Bank is also anticipated to hike interest rates next week.

The Italian newspaper Milano Finanza reported Lane stating early on Tuesday, "We do expect that more rate rises will be necessary, but a lot has already been done." Followed by "I would say with some degree of confidence that it is likely that we are near the peak of inflation."

Not even a somewhat strong economy exists as a backup.

Data released on Monday revealed that the Eurozone's economic activity decreased for a fifth consecutive month in November, pointing to the region's economy's impending recession. Retail sales also dipped as consumers cut back on spending in the face of rising prices.

According to figures released on Tuesday, industrial orders from Germany, the largest economy in the Eurozone, increased by 0.8% in October. Although it was higher than anticipated and an improvement over the revised 2.9% decline in the prior month, it is still little to cheer about.

Porsche AG, a sportscar manufacturer, will be in the spotlight in the business sector after exchange operator Deutsche Boerse announced on Monday that the company will join the German blue-chip DAX index on December 19, a little over two months after its market debut.

Puma, a manufacturer of athletic gear, will be replaced by Porsche AG and dropped to the MDAX index.

Early trading on Tuesday saw a bounce in crude oil prices following the previous session's severe declines, as numerous cities in the world's largest crude importer eased further COVID regulations over the weekend.

After the positive U.S. services sector statistics, oil prices fell more than 3% on Monday as traders assessed the EU import ban and the implementation of the Group of Seven's $60 per barrel price cap on seaborne Russian oil.

Key Developments:

• UK Construction PMI at 09:00 GMT.
• EIA Short-term Energy Outlook at 17:00 GMT.
• API Weekly Crude Oil Stock at 21:30 GMT.

(Sources: investing.com, reuters.com)