By Peter Nurse
Investing.com - European stock markets traded firmly higher Thursday, with investors digesting mainly strong corporate earnings after the Federal Reserve tempered expectations for aggressive future interest rate increases.
European equities started the session on a positive note, tracking global sentiment after Federal Reserve Chairman Jerome Powell stated that larger hikes than the 50 basis points increase the central bank announced Wednesday were not under consideration.
This allayed some investors’ fears that the U.S. central bank would raise rates by 75 basis points in upcoming meetings, potentially tipping the world’s largest economy into recession.
Adding to the buoyant tone have been some strong quarterly earnings on a busy day for corporate releases.
Shell (LON: SHEL ) stock rose 3% after the oil major reported a record first quarter profit of $9.13 billion, even after writing down $3.9 billion as a result of its decision to exit its operations in Russia, boosted by higher oil and gas prices.
ArcelorMittal SA (AS: MT ) stock climbed 3.6% after the world’s second largest steelmaker reported higher-than-expected core profit in the first quarter and increased its buyback program for 2022 to $2.0 billion, from $1.0 billion previously completed.
Air France KLM (EPA: AIRF ) stock soared over 7% after the airline pointed to a successful summer season, fueled by a recovery in ticket sales, while Deutsche Lufthansa (ETR: LHAG ) stock rose 4.1% even after the German flag carrier reported a bigger-than-expected quarterly loss on Thursday, as rising fuel costs canceled out revenue gains from booming travel demand.
On the flip side, Credit Agricole (EPA: CAGR ) stock fell 2.8% after France’s second-largest listed bank posted a sharp fall in profits for the first quarter, after it made provisions of more than half a billion euros against exposures to both Russia and Ukraine.
Oil prices edged higher Thursday, adding to the previous session’s gains after the European Union, the world's largest trading bloc, outlined plans to end its dependence on Russian oil.
The proposal, announced by European Commission President Ursula von der Leyen on Wednesday, includes phasing out supplies of Russian crude in six months and refined products by the end of 2022.
The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, will meet later in the day and is widely expected to agree to raise production targets by just over 400,000 barrels a day for June.
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