UK markets await decision on next prime minister

Britain’s next prime minister is expected to be announced in around 15 minutes, with market participants hoping the news will end the political no-man’s land created when Boris Johnson stepped down in July.

The results of a grueling, and at times bitter, leadership race in the ruling Conservative Party are due to be announced at 12.30pm London time.

The next prime minister will be either current foreign secretary Liz Truss or former finance minister Rishi Sunak, with Truss at the top of the list.

The FTSE 100 index was trading down around 0.7% around midday, while the pound was stable against the dollar.

—Katrina Bishop

Stoxx 600 down 1.2%, euro cuts losses, Uniper down 11%

The pan-European Stoxx 600 index fell 1.2% on early afternoon trades, while the euro recouped some of its earlier losses to climb back above the 0.99 mark $.

Shares of German utility and major gas importer Uniper were still down more than 11% as gas prices soared following the halt in Russian flows to Europe.

European situation ‘gloomy’ and bad news not fully priced in, says market analyst

The outlook for European markets looks “very bleak,” an analyst told CNBC on Monday, as the reality sinks in that Russia is likely to continue to restrict its gas supply to the region.

“Investors will now be very cautious going forward,” Janet Mui, head of market analysis at UK wealth management firm Brewin Dolphin, told “Squawk Box Europe”.

“The very clear implication is that euro assets will be under pressure, and we’ve seen the euro hit a new low against the dollar.”

The flip side, she said, was that the dollar would be much stronger against the euro and the pound. The dollar index, which measures the greenback against a basket of currencies, hit a new 20-year high on Monday morning.

This, in turn, could turn out to be disinflationary for the US economy, meaning the Federal Reserve doesn’t need to be so aggressive in rate hikes in the future. She said the current market price of a federal funds rate of around 4% next year could be as high as possible.

“A lot of bad news is already priced into the US market, while in Europe it’s probably not yet,” Mui said.

—Jenni Reid

Kremlin blames sanctions and Europe for gas shutdown

Russia’s Gazprom saw its shares soar on Wednesday after reporting bumper first-half profits and announcing a new dividend to shareholders.

Stoyan Vasev | Gazprom Neft press service | via Reuters

The Kremlin rejects responsibility for stopping gas supplies to Europe through its Nord Stream 1 gas pipeline, instead pointing to Western-imposed sanctions which it says made it impossible to acquire the parts necessary for the operation of the pipeline infrastructure.

Western sanctions were “causing chaos” to needed maintenance work on the pipeline, Kremlin spokesman Dmitry Peskov said in a media conference call, disagreeing with accusations from European leaders that it militarized its gas supplies.

Russian state-owned gas supplier Gazprom, which supplies gas for the Nord Stream 1 pipeline connection to Russia and Germany, has completely halted deliveries to Europe after detecting what it said was an oil leak. .

—Natasha Turak

The European Stoxx 600 index is down 1%, off the lows

Here is an update on how the Pan-European Stoxx 600 is trading this morning:

Gas prices in Europe soar as Russia halts gas flows

European gas prices soared around 30% on Monday after Russia announced it would indefinitely cut off gas flows to the continent via its Nord Stream 1 gas pipeline, rekindling fears of widespread gas shortages and rationing.

The first month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, was last seen at 281 euros per megawatt hour.

Stocks on the move: Uniper down 11%

Shares of German power utility Uniper plunged more than 11% in early trading as gas prices soared following the halt in flows from Russia to Europe.

The company, Germany’s largest gas importer, has already been forced to agree to a €15 billion bailout with the German government due to Russian supply shortages.

Euro falls below $0.99 as Russia halts gas flows to Europe

Dollar index marks 110, hits highest level since 2002

The U.S. dollar index hit 110.086 in Asian morning trade, hitting a new two-decade high.

The Japanese yen weakened further to 140.3 after hitting a 24-year low last week. The Korean won was at 1,370.87 against the greenback, a level not seen since April 2009.

CNBC Pro: This tech stock is up nearly 20% in the past year — and a pro says it still has a ways to go

Tech stocks have had a tough year so far, with some of the biggest names in the red.

But one cybersecurity firm stood out for its relative resilience, and market veteran Nancy Tengler thinks the action is just beginning.

Tengler, who is CEO and chief investment officer of Laffer Tengler Investments, said his optimism about the company could be construed as “controversial” but argued it was actually a safer bet in the tech space.

Pro subscribers can learn more here.

—Katrina Bishop

Caixin services PMI shows Chinese services activity increased in August

China’s Caixin Services Purchasing Managers’ Index for August came in at 55.0, down from 55.5 in July.

The official non-manufacturing PMI for August is 52.6.

PMI readings are sequential and represent month-on-month expansion or contraction, where the 50 point mark means there is no change from the previous month.

—Abigail Ng

CNBC Pro: Mohamed El-Erian reveals where to invest right now

Allianz's El-Erian: sovereign bond valuations

As stock and bond valuations fall simultaneously, investors should look to exit “distorted markets”, according to Mohamed El-Erian, chief economic adviser at Allianz.

“There was a time when all asset prices went up – stocks and bonds – and we forgot about correlations. Why worry about correlations when you get paid to hold both risk assets and risk mitigating assets? It’s a wonderful world,” he said. CNBC’s Steve Sedgwick on Friday.

“But the first half taught us, and what we have learned since mid-August, [is] that they can both fall at the same time.”

Investors looking for alternatives have several options, El-Erian says.

CNBC Pro subscribers can learn more here.

—Elliot Smith and Katrina Bishop

European markets: here are the opening calls

According to IG data.

The data releases include preliminary eurozone unemployment data for the second quarter as well as gross domestic product for the second quarter. The latest UK inflation figures for July will be released along with the preliminary Dutch Q2 GDP.

Revenue comes from Uniper, Carlsberg, Persimmon, Balfour Beatty, BAT and National Grid.