By Peter Nurse 

- European stock markets traded in a mixed fashion Tuesday, with investors digesting the potential for more sanctions against Moscow, which could lead to higher commodity prices and fuel inflation concerns.

By 3:40 AM ET (0740 GMT), the DAX in Germany traded 0.4% higher, the CAC 40 in France rose 0.1% while U.K.’s FTSE 100 dropped 0.1%.

The United States and Europe were planning new sanctions to punish Moscow over alleged atrocities in Ukraine, with U.S. President Joe Biden on Monday accusing Russian President Vladimir Putin of war crimes over civilian killings in the Ukrainian town of Bucha.

Ukraine President Volodymyr Zelensky is set to address the United Nations Security Council later Tuesday after earlier warning that reported atrocities in Borodyanka, a settlement near Kyiv, could be worse than in Bucha.

The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at American banks, but the major move would be for the European Union, and Germany in particular, to ban the import of Russian gas and oil.

Germany is heavily dependent upon Russia for energy, and agreeing to such a move would run into political difficulties given the economic repercussions.

German banks already expect sharply slower growth this year of around 2% due to the war in Ukraine, said Christian Sewing, the chief executive of Deutsche Bank and president of Germany's BDB bank lobby on Monday. 

"The situation would be even worse if imports or supplies of Russian oil and natural gas were to be halted. A significant recession in Germany would then be virtually unavoidable," Sewing said. 

Oil prices traded higher Tuesday, aided by the prospect of more sanctions on Russia, adding to the strong gains seen in the previous session.

By 3:40 AM ET, U.S. crude futures traded 0.8% higher at $104.12 a barrel, while the Brent contract rose 0.8% to $108.43. Both contracts settled more than 3% higher on Monday.

The European economic data slate Tuesday includes a number of March manufacturing and services PMI releases from the region, while French industrial production slumped 0.9% in February, a sharp drop from January’s revised 1.8% gain. 

In corporate news, Go-Ahead Group (LON:GOG) stock rose 4.4% after the British transport operator said it will reinstate its pre-COVID-19 dividend policy this year while also unveiling plans to expand its operations.

Additionally, gold futures fell 0.3% to $1,928.40/oz, while EUR/USD traded 0.1% higher at 1.0984.