On Monday, European stocks climbed higher, after last week had seen a sharp sell-off because of worries about recession. Meanwhile, French shares were down after the parliamentary election in the country saw President Emmanuel Macron not win an absolute majority.
European Stock Index Climbs
There was a 0.4% increase in the European STOXX 600 index, thanks to gains in retail, travel and banking stocks that had been battered in the previous session. Trading was also made choppy because of a holiday in the United States.
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There was a 4.6% decline in the benchmark index last week, as markets had recorded a global sell-off because of worries of a possible recession brought on by the aggressive interest rate hikes by the US Federal Reserve and other major central banks.
There was a 0.1% rise in the French blue-chip CAC 40 index, but it was lagging behind other indexes in the region. President Emmanuel Macron’s Ensemble coalition was not able to secure the absolute majority required for control the parliament over the weekend, even though they got the most seats in the National Assembly.
The major banks in the country all fell in the morning trading hours, including Credit Agricole, BNP Paribas and Societe Generale. Market analysts said that this means structural reforms are less likely, but the stance does not change much.
So far, the STOXX 600 index has already recorded declines of 17% this year. This is because because risk appetite has dampened significantly due to a combination of worries fueled by the slowing Chinese economy, rising inflation and a crisis of high cost of living in the United Kingdom.
Analysts dictated that it was not likely that the markets have already hit bottom and there would be continued volatility because inflation may not come down before the end of the year.
Individual Gains and Declines
According to data, there was a surge in German producer prices in May of about 33.6%, which was more than expected. There was a 2.1% drop in the constructions and material index drop in Europe. This was because Kingspan, the building insulation specialist in Ireland, said that the last two months had seen mood deteriorate in most markets.
There was a 12.9% fall in Kingspan’s shares, while a 5% fall was recorded in Saint-Gobain of France and Rockwool, its Danish peer. There was also a 5.7% increase in Renault, as the French carmaker’s stock got an upgrade to ‘Buy’ by Jeffries.
A 17.2% surge was also recorded in the shares of Valneva, after US pharmaceutical giant Pfizer Inc. announced that it would buy an 8.1% stake in the French vaccine firm, which would be valued at 90.5 million euros.
London’s FTSE 100 Rises
Meanwhile, the FTSE 100 in London received a boost from gains in financials and energy stocks, as it rose after recording a drop for three straight weeks. There was a 0.3% gain in the index, along with the FTSE 250. The rise in crude prices gave Shell and BP a boost of 1.3% and 0.8%, respectively.
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