By Peter Nurse

- European stock markets are expected to open mainly lower Wednesday, as investors digest ramped up geopolitical tensions, a troubled global growth outlook as well as more quarterly corporate earnings.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France traded 0.1% lower, while the FTSE 100 futures contract in the U.K. was largely flat.

European equity indices have been pressured so far this week, with the DAX closing Tuesday down 1.2%, by worries that China’s insistence on stringent COVID restrictions will harm domestic and global growth. This follows the news that its outbreak in Shanghai, which has entered its fourth week, has spread to other big Chinese cities, including the capital Beijing.

Fears that growth in the world’s second largest economy may be slowing have coincided with a hawkish pivot from the Federal Reserve, with the U.S. central bank looking to combat soaring U.S. inflation by aggressively increasing interest rates.

Back in Europe, tensions over the Russia-Ukraine conflict were heightened after Gazprom, Russia's state-owned energy giant, informed Poland and Bulgaria that it would halt gas supplies from Wednesday.

Russia is demanding payments for its gas in rubles as sanctions over its invasion of Ukraine bite, something that most western countries are not prepared to comply with.

This escalation of Russia's row with the West caused oil prices to push higher Wednesday, adding to the previous session’s gains.

By 2:05 AM ET, U.S. crude futures traded 0.2% higher at $101.91 a barrel, while the Brent contract rose 0.4% to $105.03. Both benchmarks gained around 3% on Tuesday.

It’s a big day for earnings in Europe, with the banking sector once more to the fore.

Deutsche Bank (ETR:DBKGn) posted a better-than-expected 17% rise in first quarter profit as the German lender registered strong investment banking revenues despite the uncertain outlook caused by the war in Ukraine.

Credit Suisse (SIX:CSGN) fared less well, reporting a 273 million Swiss franc ($283.6 million) first quarter loss while announcing another management reshuffle. The Swiss bank had warned last week that it expected a loss for the quarter after increasing legal provisions while also taking a hit from the fallout of Russia's invasion of Ukraine.

Results are also due from the likes of Lloyds (LON:LLOY), GlaxoSmithKline (LON:GSK), Persimmon (LON:PSN) and WPP (LON:WPP), while Renault (EPA:RENA) will also be in focus following a report that the French auto giant is planning on transferring its majority stake in Russian carmaker Avtovaz to a Russian science institute.

There were also significant earnings after Tuesday’s close on Wall Street, with Google parent Alphabet (NASDAQ:GOOGL) reporting first-quarter revenue below expectations, while software giant Microsoft (NASDAQ:MSFT) forecast double-digit revenue growth for its next fiscal year.

Looking at the economic data slate, the GfK German consumer climate index slumped to -26.5 in May, from a revised -15.7 the previous month, with the French equivalent number due later in the session.

Additionally, gold futures fell 0.2% to $1,899.60/oz, while EUR/USD traded 0.1% higher at 1.0650.