European stocks climb defensively, weak Chinese data fuels concerns

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The DAX chart of the German stock price index is pictured on the stock exchange in Frankfurt, Germany, August 12, 2022. REUTERS/Staff

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  • China-exposed sectors lead losses
  • HelloFresh jumps after confirming 2025 target
  • Henkel raises organic sales outlook despite cost headwinds

Aug 15 (Reuters) – European stocks hovered near two-month highs on Monday as signs of a slowing Chinese economy prompted investors to turn to defensive sectors such as healthcare and consumer goods. consumer staples, generally considered immune to economic cycles.

The pan-European STOXX 600 (.STOXX) rose 0.3%. The benchmark was trading near levels needed to recoup all of its June losses when fears of aggressive U.S. interest rate hikes and a recession dominated sentiment.

health actions <.sxdp> were among the biggest boosts from European stock markets on Monday.

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AstraZeneca (AZN.L) rose 2.3% after the drugmaker said its cancer drug, Enhertu, developed with Japan’s Daiichi Sankyo (4568.T) delayed the progression of a form of breast cancer. advanced breast in previously treated patients. Read more

food and drink <.sx3p> rose about 1% to lead the gains, while utilities (.SX6P) added 0.8%.

The gains helped offset losses in China-exposed automakers (.SXAP), oil (.SXEP) and miners (.SXPP) after the country’s central bank lowered key rates in a surprise move to boost demand as data showed an unexpected slowdown in the economy. July. Read more

“Volatility in Europe is priced in for the rest of the year, given the war in Ukraine, China’s zero COVID policy, inflation and whether central bank hikes make it through. tame things to a point where investors feel confident,” said Danni Hewson, chief financial officer. analyst at AJ Bell.

Investors await flash eurozone GDP and HICP figures due this week, as well as US retail sales data due on Wednesday.

“People are waiting to hear what inflation is doing to the consumer’s wallet – we’ll probably get a real glimpse this week of how the consumer is doing and today is a deep breath before the storm” , Hewson added.

Meanwhile, German wholesale prices fell 0.4% in July from the previous month, the first drop since October 2020, the Federal Statistical Office reported.

Eurozone government bond yields fell on fears of a possible recession.

European stock markets rallied from their June lows, echoing bullish sentiment on Wall Street as signs that US inflation may have peaked encouraged investors to cut rate hike bets aggressive moves by the Federal Reserve.

The STOXX has climbed more than 10% since hitting a yearly low in June, but remains down 9.3% for the year.

Among other stocks, HelloFresh (HFGG.DE) jumped 2.7% after the German meal kit maker said it could still meet its prior outlook for 2022 despite lowering forecasts last month. Read more

Henkel (HNKG_p.DE) gained 0.5% as the consumer goods group raised its outlook for organic sales growth in fiscal 2022.

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Reporting by Sruthi Shankar, Johann M Cherian and Anisha Sircar in Bengaluru; Editing by Sriraj Kalluvila and Ken Ferris

Our standards: The Thomson Reuters Trust Principles.

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