European stocks extend gains but recession risks loom

0

The DAX chart of the German stock price index is pictured on the stock exchange in Frankfurt, Germany, June 20, 2022. REUTERS/Staff

Join now for FREE unlimited access to Reuters.com

Register

  • Sales of luxury goods are expected to increase by at least 5% this year – Bain
  • Germany risks recession as Russian gas crisis deepens
  • EasyJet slips as Spanish cabin crew go on strike
  • Spain’s IBEX index slides as electric utilities weigh

June 21 (Reuters) – European stocks rose for a third straight session on Tuesday, led by the chemicals and resources sectors, as last week’s sharp selloff on recession fears lured bargain hunters .

The pan-European STOXX 600 index (.STOXX) rose 0.4%, after hitting an over-year low last week.

Miners (.SXPP) gained 1.3% after hitting December 2021 lows in the previous session, while oil and gas stocks (.SXEP) rose 1.1% as crude prices rose due to tight supply.

Join now for FREE unlimited access to Reuters.com

Register

Boosting chemical stocks (.SX4P), French industrial gases company Air Liquide (AIRP.PA) rose 3.1% after securing its biggest power purchase deal with Swedish utility Vattenfall.

Other major increases included luxury stocks following a bullish report from Bain. The consultancy said sales of luxury goods are expected to increase by at least 5% this year as shoppers in the United States and Europe continue to buy high-end watches, jewelry and shoes. Read more

Yet concerns about growth persisted after an industry body warned that Germany – the region’s economic powerhouse – would face some recession if the already tight Russian gas supply s stopped completely. Italy said it would consider offering financial support to help companies fill gas storage to avoid a deeper crisis in winter. Read more

“With the economic headwinds in the eurozone continuing to grow, we advise investors to focus on defensive segments of the equity market, such as healthcare, as well as value sectors,” UBS said in a statement. customer note.

The European benchmark index lost 4.6% last week, its worst weekly performance since early March, after interest rate hikes in the United States, Switzerland and Britain fueled fears that Aggressive tightening by major central banks does not trigger a recession.

The European Central Bank has reaffirmed its intention to raise ECB interest rates twice this summer. Read more

“When you think about weak equity sentiment in response to hawkish central banks and weaker growth, not much has changed since last week,” said Karim Chedid, head of investment strategy for iShares EMEA at BlackRock. .

“I wonder how long this reprieve can last.”

The focus will be on Federal Reserve Chairman Jerome Powell’s testimony before the Senate and House, as well as European business activity and UK inflation data later this week.

British airline easyJet (EZJ.L) fell 6.3% as its Spain-based cabin crew plan to go on strike for nine days to demand a pay rise. Read more

Spanish electric utilities Iberdrola (IBE.MC), Endesa (ELE.MC) and Naturgy (NTGY.MC) fell around 3% each after learning that the country’s government was preparing a new tax on profits electric utilities. The IBEX Broad Index (.IBEX) underperformed, down 0.6%. Read more

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Subhranshu Sahu, Anil D’Silva and Sriraj Kalluvila

Our standards: The Thomson Reuters Trust Principles.

Share.

About Author

Comments are closed.