European Stocks Higher; Positive Corporate News Helps Sentiment

  • Stock Market News
European Stocks Higher; Positive Corporate News Helps Sentiment
Credit: © Reuters.

By Peter Nurse - European stock markets traded higher Tuesday, rebounding after a broad selloff as investors seek bargains, although the combination of rising interest rates and lower economic growth continue to cause concerns.

By 4:10 AM ET (0810 GMT), the DAX in Germany traded 1.5% higher, the CAC 40 in France rose 1%, and the U.K.’s FTSE 100 climbed 0.7%.

European markets are attempting a rebound Tuesday after the major regional indices all closed over 2% lower on Monday, with the pan-European STOXX 600 index falling to two-month lows. These losses followed the weak global trend as central banks started to aggressively raise interest rates to combat inflation, prompting growing fears of recession.

Some positive corporate news has helped the tone, with Bayer (ETR: BAYGN ) stock up 0.2% after the German agriculture and pharmaceuticals company took another step on the road to recovery on Tuesday, posting strong first quarter earnings , thanks to a revived consumer health segment and a crop science business supported by soaring prices for agricultural commodities.

Swedish Match (ST: SWMA ) stock soared 25% after the nicotine products company confirmed a takeover approach from larger U.S. rival Philip Morris (NYSE: PM ) as the Marlboro maker looks to expand its smoke-free options.

Renault (EPA: RENA ) stock rose 0.7% after the French car manufacturer set targets to expand its Mobilize car-sharing business as well as closer cooperation with Chinese auto giant Geely Automobile Holdings (HK: 0175 ), which is buying a 34% stake in Renault’s Korean unit.

The tone was helped by stronger than expected Italian industrial production data for March climbing 3.0% on the year, a small drop from the revised 3.4% growth seen the previous month.

However, fresher data showed U.K. retail sales fell 0.3% in April from a year earlier, the first drop since January 2021 when the nation was in lockdown, according to a closely watched survey by the British Retail Consortium.

Attention now turns to the release of Germany's closely watched ZEW sentiment index later in the session, which is expected to have dropped again in April from a level that was already the lowest since the beginning of the pandemic in 2020.

Russia’s invasion on Ukraine remains another source of market tension. Russian President Vladimir Putin was silent about plans for an escalation in Ukraine on Monday as he marked the Soviet Union's victory over Nazi Germany in World War II, but the fighting continues.

Oil prices edged higher Tuesday, rebounding after the previous session’s declines as it appeared the European Union will soften its stance on a phased Russian oil embargo as the countries most dependent on Russian energy, like landlocked Hungary, Slovakia, and the Czech Republic, have sought exemptions.

The market was boosted last week after the European Commission proposed a deal to eventually ban Russian oil, but the proposal requires approval from all 27 EU countries, something which has proved difficult so far.

By 3:10 AM ET, U.S. crude futures traded 0.5% higher at $103.54 a barrel, while the Brent contract rose 0.3% to $106.23. Both benchmarks posted their biggest daily percentage fall since March on Monday, dropping by 5% to 6%.

Additionally, gold futures traded largely flat at $1,858.30/oz, while EUR/USD traded 0.1% higher at 1.0568.

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