AFP

Eurozone equities sank Tuesday, as natural gas prices surged after Russia tightened the screw on supplies in fresh Ukraine fallout.

Investors digested also major earnings updates on the eve of another likely large US interest rate hike aimed at tackling soaring inflation.

General Motors reported a big drop in second-quarter profits owing to a semiconductor shortage.

Google parent Alphabet, Coca-Cola, Microsoft and McDonald’s are also publishing results Tuesday.

In Europe, stock markets “are under pressure as investors absorb what the news from Gazprom is likely to mean when it comes to gas supplies over the next few days”, noted CMC Markets analyst Michael Hewson.

Europe gas reference Dutch TTF surged more than ten percent to 197.97 euros per megawatt hour, one day after Russia’s Gazprom said it would cut daily gas deliveries to Europe via the Nord Stream pipeline.

Oil prices also leapt on concerns of a broader squeeze on global energy supplies, while the euro remained on the back foot against the dollar.

Gazprom will cut the gas deliveries to 33 million cubic metres a day — about 20 percent of the pipeline’s capacity — from Wednesday.

That has heightened market worries over supplies during the northern hemisphere winter later this year.

At the same time, European Union member states have reached agreement on how to cut their consumption of gas by 15 percent and reduce their dependence on Russian energy.

Gas prices remain way below the record March peak of 345 euros struck after Russia launched its assault on Ukraine.

Markets.com analyst Neil Wilson predicted a “big push to fill (gas) stockpiles in what is left of the summer, at any price, to avert a winter crisis”.

EU states have accused Russia of squeezing supplies in retaliation for Western sanctions.

Elsewhere Tuesday, Asian stock markets closed mixed.

Investors welcomed news that e-commerce giant Alibaba would seek a primary listing in Hong Kong, which could pave the way for it to be traded by mainland Chinese investors.

– Key figures at around 1100 GMT –

Frankfurt – DAX: DOWN 1.1 percent at 13,064.82 points

Paris – CAC 40: DOWN 0.7 percent at 6,196.57

London – FTSE 100: UP 0.4 percent at 7,335.10

EURO STOXX 50: DOWN 0.8 percent at 3,575.41

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,655.21 (close)

Hong Kong – Hang Seng Index: UP 1.7 percent at 20,905.88 (close)

Shanghai – Composite: UP 0.8 percent at 3,277.44 (close)

New York – Dow: UP 0.3 percent at 31,990.04 (close)

Euro/dollar: DOWN at $1.0148 from $1.0223 Monday

Pound/dollar: DOWN at $1.1998 from $1.2046 

Euro/pound: DOWN at 84.59 pence from 84.83 pence

Dollar/yen: DOWN at 136.59 yen from 136.65 yen

Brent North Sea crude: UP 1.3 percent at $106.47 per barrel

West Texas Intermediate: UP 1.9 percent at $98.56 per barrel

Croatia celebrated Tuesday the opening of a long-awaited bridge linking its southern Adriatic coast including Dubrovnik with the rest of the country, bypassing a narrow strip of Bosnian territory.

The 2.4-kilometre (1.5-mile) span reaches out from the Croatian mainland to the Peljesac peninsula that connects with the southern part of Croatia’s coastline nestled between the sea and the Dinaric Alps.

Festivities started early Tuesday with musical performances and a boat race, while dozens of pedestrians snapped pictures on the bridge ahead of a ceremony this evening featuring a speech by Croatian Prime Minister Andrej Plenkovic and a video address by Chinese Premier Li Keqiang.    

“It is a major thing for people here since they did not even feel like they were living like in their own country,” said Joso Miletic, 75, who travelled from his village near the city of Zadar on the central coast to watch the opening of the bridge.

“This is the merging of Croatia into a whole,” he added. 

The link will bring an end to the untold hours spent by commuters, merchants, and tourists at the Bosnian border and is one of the country’s most ambitious infrastructure projects since Croatia declared independence from Yugoslavia in 1991.

It was the bloody dissolution of the federation, however, that left a patchwork of divisions across the Balkans, with the frontiers between its six former republics transformed into international borders.

Bosnia maintained its coastal access in the end, but its small outlet leading to the Adriatic Sea cut right through Croatia. 

As a result, around 90,000 people, including residents in the country’s tourism hotspot of Dubrovnik, remained cut off from the rest of the country until now. 

The hard border brought lines and red tape for traders, and headaches for tourists hoping to get south by road.

“It is indeed a historic project for Croatia,” said Sabina Mikulic, owner of a hotel, glamping site, and winery in Orebic — the peninsula’s largest town.

Inhabitants of the picturesque region of red vines, pebble beaches and oyster farms are looking forward to the end of their geographic isolation caused by the Bosnian border.

The hours-long waits at the border and fears over missing the day’s last ferry will now become a thing of the past, they say.  

“It was really exhausting and made people living here bitter,” Mikulic told AFP.

– EU funded, Chinese made –

The opening of the bridge has been a long time coming and not without controversy. 

Croatia took its first stab at building the bridge in 2007 only for the project to stall five years later due to budgetary constraints.

In 2017, the European Union — which Croatia joined in 2013 — allocated 357 million euros ($365 million), roughly 85 percent of the cost.

A Chinese firm was selected in 2018 to build the bridge — marking the first significant Chinese involvement in an infrastructure project in Croatia.

But not all were happy with the bridge’s construction, with officials in Bosnia claiming it would hamper its maritime access by preventing high-tonnage vessels from entering its lone port. 

Zagreb eventually agreed to increase the height of the bridge to 55 metres (181 feet) in an attempt to quell the dispute.

The opening of the bridge comes as Croatia is angling for a tourism rebound this year as it hopes to attract pre-pandemic levels of visitors.

The country of 3.8 million people attracts millions of tourists every year hoping to soak up the sun along its stunning coast dappled with more than 1,000 islands and islets.

For retired piano teacher Smilja Matic, who has vacationed for years in the Croatian village of Komarna near the entrance to the new bridge, the link to the mainland is a win for locals and tourists alike.

“It means a new life for locals and for people who travel by plane to Dubrovnik, like me. It’s major progress,” she told AFP.

Outside of tourism, the bridge will likely serve as a boon for businesses and traders as well. 

For decades, oyster farmer Mario Radibratovic was subjected to hours of extra travel to bring his perishable shellfish north to market due to waiting times at the border.

But with the opening of the bridge, the journey north will shrink dramatically. 

For the 57-year-old, the opening of the bridge will bring “immeasurable relief”.

“We are finally becoming part of Croatia,” Radibratovic told AFP who farms oysters and mussels in the village of Mali Ston.

“Until now we felt like second-class citizens.”

General Motors reported a big drop in second-quarter profits Tuesday due to the grinding semiconductor shortage, although the automaker confirmed its full-year forecast amid strong pricing.

Profits fell 40 percent to $1.7 billion as the Detroit giant was unable to deliver more than 90,000 vehicles unfinished due to missing parts.

But the car manufacturer said production in the second half of 2022 would be “up sharply.”

Revenues rose 4.7 percent to $35.8 billion.

GM reported sharply lower auto deliveries in all regions, including China, where government restrictions connected to the latest Covid-19 outbreak dented sales.

A silver lining has continued to be limited dealership inventories that has kept pricing strong. In the United States, the average price was up $6,600 compared with the year-ago period.

GM alluded to strong customer demand “with most vehicles turning immediately as they arrive at dealers,” the company said in a powerpoint.

“We have been operating with lower volumes due to the semiconductor shortage for the past year, and we have delivered strong results despite those pressures,” said GM Chief Executive Mary Barra in a statement.

Barra alluded to worries about a slowdown or recession, saying “we have modeled many downturn scenarios and we are prepared to take deliberate action when and if necessary.”

Shares fell 1.3 percent to $34.08 in pre-market trading.

British airline EasyJet on Tuesday said it took a sizeable financial hit from sector-wide disruptions, notably staff shortages, but still slashed quarterly losses as demand recovers.

As airport staff shortages spark flight cancellations, EasyJet said in a statement that it booked a one-off charge totalling £133 million ($160 million).

That saw the airline post a pre-tax loss of £114 million in the group’s third quarter, or the three months to the end of June.

However, that marked a major improvement from a loss of around £318 million for the same period of last year, as travel demand picked up from a Covid-induced downturn.

Third-quarter revenue increased more than eight-fold to £1.8 billion, while traffic rebounded close to pre-Covid levels. 

EasyJet chief executive Johan Lundgren said the carrier was hit by “short-term disruption issues”, but that it was experiencing “the return to flying at scale”.

Traffic surged more than seven-fold to 22 million passengers in the quarter after the lifting of Covid travel curbs.

That was almost 90 percent of the group’s 2019 capacity, before the pandemic ravaged the global aviation sector by grounding planes worldwide.

EasyJet said “the unprecedented ramp-up across the aviation industry, coupled with a tight labour market” had caused “widespread operational challenges culminating in higher levels of cancellations than normal”.

Despite the disruption, EasyJet operated 95 percent of its planned schedule in the quarter.

Airlines and airports are struggling to recruit staff having sacked thousands of workers as the world entered Covid pandemic lockdowns. 

E-commerce giant Alibaba said Tuesday it will seek a primary listing in Hong Kong, potentially giving access to China’s vast pool of investors, as mainland officials indicate a long-running crackdown on the tech sector could be coming to an end.

The move also comes as Chinese tech companies traded in New York grow increasingly worried about a regulatory drive by United States authorities as tensions simmer between the superpowers.

While Alibaba has a secondary listing in Hong Kong, it does not allow it to join a popular Stock Connect programme that links to bourses in Shanghai and Shenzhen.

The primary listing, which is expected to take place before the end of the year, would open that door.

News of the plan sent shares in Alibaba soaring 4.8 percent Tuesday, boosting other tech firms and helping drag the broader Hang Seng Index higher.

The Hangzhou-based group is one of a number of tech behemoths ensnared in a wide-ranging regulatory crackdown on alleged anti-competitive practices since late 2020.

The campaign to rein in big tech is driven by fears that massive internet companies control too much data and have expanded too quickly.

But officials appear to be taking a lighter touch as they grapple with a slowing economy. And in May, Premier Li Keqiang urged support for tech companies to list both domestically and abroad.

CEO and group chairman Daniel Zhang said on Tuesday the primary listing aimed to foster “a wider and more diversified investor base to share in Alibaba’s growth and future, especially from China and other markets in Asia”.

“Hong Kong is also the launch pad for Alibaba’s globalisation strategy, and we are fully confident in China’s economy and future.”

Alibaba said on Tuesday it had an average daily trading volume of $3.2 billion in the United States in the first six months of the year, while its Hong Kong secondary listing saw around $700 million.

– Mainland access –

Hong Kong’s Stock Connect programme allows firms to take advantage of liquidity from mainland China for easier financing and higher valuations, but to qualify they must conduct a majority of their annual trading in the Chinese finance hub.

Alibaba is among a category of “innovative” Chinese firms with weighted voting rights or variable interest entities that would be eligible for dual-primary listing in Hong Kong, following a rule change by the bourse in January.

Analyst Willer Chen, at Forsyth Barr Asia, told Bloomberg that the move would be “massive” for Alibaba, adding that inclusion in Stock Connect could lead to a “more diversified investor base”.

Beijing has opposed an attempt by US regulators to inspect the audit papers of Chinese firms listed there, and Alibaba is one of 250 companies facing potential removal if no deal is reached.

Domestically, Alibaba is still reeling from the tech crackdown as well as China’s slowing economy caused by the fallout from strict Covid curbs.

The firm has lost around two-thirds of its value since a 2020 peak, according to Bloomberg, and in May the firm reported that profit fell 59 percent in the last fiscal year.

– Shake-up at Ant –

News of plans for the dual-primary listing came as Alibaba announced it had removed all executives linked to its digital payments arm Ant Group from a joint governing body.

Seven Ant Group executives including CEO Eric Jing and Chief Technology Officer Ni Xingjun were removed from Alibaba Partnership, a group that can nominate the majority of Alibaba’s board, as of May 31, according to an annual report Tuesday.

It is part of a lengthy state-guided restructuring process after a planned 2020 share offering by Ant Group — which would have been the world’s largest IPO at the time — was scuttled last minute, according to a spokesman for the company.

Ant Group has terminated its data sharing agreement with Alibaba and reshuffled its board recently, filling half the seats with independent directors and reducing the number of non-executive directors from the Alibaba Group to two from three.

But Beijing last month rebuffed reports it had started discussions on the potential revival of the IPO.