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European stocks bounce back after steep declines in previous session

Shares in Europe rose on Wednesday, prompted by a sharp rise in Just Eat Takeaway shares after Amazon agreed to take a stake in the company’s Grubhub arm, and by stronger-than-expected German industry data.

The regional Stoxx Europe 600 index returned from sharp declines in the previous session to a 1.5% increase until late in the morning. The German DAX added 1.4%, while the London FTSE 100 rose 1.6%.

Stoxx closed down 2.1% on Tuesday, hit by concerns about an impending economic slowdown and the possibility that Norwegian gas supplies will be halted by a workers’ strike. The Norwegian government intervened Late Tuesday for the end of the operation.

Market moves on Wednesday came when Just Eat Takeaway and Amazon announced a US Commercial Agreement, According to which Amazon has agreed to take 2% of the shares of the American company Just Eat Grubhub, and has given Amazon Prime members access to the food delivery platform. Shares of Just Eat, with a market capitalization of 3 billion euros, rose 17%.

Help boost sentiment after the previous day’s sales, fresh data showed German industrial orders rose unexpectedly 0.1% in May after falling 1.8% in April. Economists polled by Reuters forecast a 0.6% decline.

But Sharon Bell, a senior European equities strategist at Goldman Sachs, warned that “more consistent data show that Germany is weakening into this modest slowdown”, adding that recent fluctuations show that “market volatility is high at the moment: there is a lack of confidence [among investors] In terms of what positions to take. ”

In Asian stock markets, Hong Kong’s Hang Seng lost 1.2% as new outbreaks of Cubid-19 exacerbated fears of recession.

U.S. government bond markets were more stable on Wednesday, but yields on two-year bonds continued to trade above those of 10-year bonds after turning for the third time this year on Tuesday. For 10 years falling below those of their counterparts for shorter dates, preceded any recession in the US in the last half decade.

As another indication of recession fears, the dollar soared on Tuesday to a new 20-year high with the euro falling. The dollar, which measures the U.S. currency against a basket of six others, rose 0.2 percent in late-morning European deals.

Expectations of an economic slowdown pushed Wall Street’s high-tech Nasdaq Composite up Tuesday, leading it to a 1.7% close as investors entered companies like Amazon and the owners of Facebook Meta, which are typically expected to maintain profit growth during times of market pressure. .

The tightening of aggressive monetary policy has hurt technology companies’ valuations this year, with the chance of higher interest rates biting into their projected cash flows and profits.

But, with the help of these groups, fears of a slowdown have in recent weeks lowered investor expectations about how much the US Federal Reserve will raise interest rates. Markets are now pricing a benchmark rate of 3.3% by February 2023, down from expectations of 3.9% just over three weeks ago .

Futures that follow the US S&P 500 added 0.1% on Wednesday morning, as do the contracts that follow the Nasdaq 100. Details of the Fed’s latest monetary policy meeting, due later Wednesday, may give further hints As for the extent to which the central bank is willing to tighten against the background of economic gloom.

In commodity markets, Brent crude rose 1.1 percent to $ 103.91 a barrel after the International Oil Index fell nearly 10 percent on Tuesday. West Texas Intermediate, the U.S. marker, rose 0.2 percent to $ 99.72 after falling below $ 100 on Tuesday, the first time since May.

The pound lost 0.1% against the dollar on Wednesday after Rishi Sonak resigned as British chancellor on Tuesday and Nadim Zahawi was appointed as his replacement.

European stocks bounce back after steep declines in previous session Source link European stocks bounce back after steep declines in previous session

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