TOKYO — Stocks opened lower in Europe and oil prices fell on Thursday, after Italian Prime Minister Mario Draghi resigned following a boycott of a confidence vote by key coalition allies.

The change likely signals a snap election and more uncertainty for Italy and for Europe as a whole at a time when the region is set to slide into recession due to energy shortages and other ripple effects from the war in Ukraine.

The German DAX lost 0.6% to 13,202.55 while the CAC 40 in Paris fell slightly by 0.1% to 6,178.49. Britain’s FTSE 100 fell 0.5% to 7,229.41. On Wall Street, the future of the S&P 500 fell 0.2% while that of the Dow Jones fell 0.3%.

Italy’s benchmark, the FTSE MIB, fell 0.2% to 20,925.90. He started the year around 28,000.

Draghi’s national unity government imploded on Wednesday after members of his uneasy coalition of right, left and populists rejected his call to regroup to complete the legislature’s natural term and ensure implementation of the agenda pandemic recovery program funded by the European Union.

The disarray comes at a time when Italy is grappling with soaring inflation and energy costs, Russia’s war on Ukraine and the ongoing reforms needed to clinch the rest of the 200 billion euros from EU recovery funds.

The European Central Bank was to announce Thursday an interest rate hike, the first in 11 years, to try to contain inflation.

Benchmark U.S. crude fell $3.86 to $96.02 a barrel in electronic trading on the New York Mercantile Exchange early Thursday. It fell 86 cents to $99.88 a barrel on Wednesday. Brent crude, the international price standard, fell $3.81 to $103.11 a barrel.

The cost of the euro remained unchanged at $1.0179, while the US dollar fell from 138.25 yen to 138.80 Japanese yen.

In Asia, investors were watching inflation and the outlook for a slowing Chinese economy.

The benchmark Tokyo Nikkei 225 edged up 0.4% to end at 27,803.00 after the Bank of Japan concluded a two-day policy meeting without any major policy changes, as reported. usually waited.

The BOJ has signaled that it does not intend to follow the lead of other central banks, including the US Federal Reserve, in raising interest rates to curb inflation. Japan went through years of stagnation, when deflation or falling prices were a major issue.

Japan said its trade deficit for the first half of this year stood at nearly 8 trillion yen ($58 billion), pushed up by soaring oil prices and a weaker yen.

The deficit for the January-June period marked the second straight semester of deficits. Imports for the six months fell nearly 38% to 53.86 trillion yen ($390 billion), while exports rose 15% to 45.94 trillion yen ($332 billion).

In June, imports jumped 46% while exports rose 19%, compared to the same month a year earlier. Imports from the Middle East, the source of much of Japan’s energy supplies, jumped 125%.

Australia’s S&P/ASX 200 rose 0.5% to 6,794.30 and South Korea’s Kospi gained 09% to 2,409.16.

But Hong Kong’s Hang Seng slipped 1.5% to 20,574.63, while the Shanghai Composite fell 1.0% to 3,272.00.

A mid-week rally, fueled by strong corporate earnings, appears to be running out of steam.

“After Wall Street’s strong performance over the past couple of days, particularly for tech stocks, markets may be taking some pause. Persistent caution persists for Chinese equities amid virus and property sector risks,” said Yeap Jun Rong, market strategist at IG in Singapore, in a comment.

On Wednesday, Wall Street ended with gains as investors welcomed another round of encouraging earnings reports from US companies.

The S&P 500 rose 0.6%. The Dow Jones Industrial Average gained 0.2%, while the Nasdaq gained 1.6%. The Russell 2000 climbed 1.6% to 1,827.95.

Earnings reporting season is gathering pace, with more industry types offering details on how high inflation and concerns about a possible recession are affecting their clients.

Yuri Kageyama is on Twitter