European stocks up; German Retail Sales Slump By


© Reuters

By Peter Nurse – European stock markets edged higher on Wednesday, rebounding at the start of a new month, although concerns about the strength of the region’s economic recovery remain.

As of 03:35 ET (07:35 GMT), the in Germany was trading up 0.6%, the in France was up 0.4% and the UK was up 0.2%.

European equities started June on a positive note, rebounding from the previous month’s end with steep losses – the DAX closed down 1.3% and the CAC 40 fell 1.4% – so that they jumped 8.1% year-on-year in May, a record.

That fueled fears that the European Central Bank, which meets next week, will be forced to move quickly to raise interest rates, bolstering the case for an outsized rise in interest rates.

The impact of soaring inflation is already being felt, with a 5.4% drop from April, as consumers felt higher prices, especially for groceries, and retailers facing supply issues due to shutdowns in China.

The next step is the release of May survey data for the eurozone, amid fears that runaway inflation and supply chain issues could further affect confidence in this key sector.

Data on Wednesday showed Chinese factory activity fell less sharply than expected in May, rising to 48.1 in May from 46.0 in April, a 26-month low.

In company news, German Bank (ETR:) The stock rose 0.8% after the German lender replaced Asoka Woehrmann, the chief executive of DWS, its listed asset management arm, hours after German police raided its headquarters as part of a greenwashing investigation.

Shares of BT Group (LON:) edged up 0.4% despite Britain’s competition watchdog starting to investigate the British telecommunications group’s deal to combine its sports broadcasting business with Warner Bros. Discovery (NASDAQ:).

Vivendi (EPA:) The stock rose 1.2% after French group CEO Arnaud de Puyfontaine told Italian daily La Repubblica that the main investor in Telecom Italia (BIT:) would oppose a sale of the network of the Italian group if it undervalued the asset. Telecom Italia shares fell 0.6%.

Oil prices rose on Wednesday, still supported by the European Union’s decision to drastically cut oil imports from Russia and China ended its COVID-19 lockdown in Shanghai.

However, the gains have been capped by the fact that some producers are considering suspending Russia’s participation in the production agreement agreed by the Organization of the Petroleum Exporting Countries and its allies.

Exempting Russia, as Western sanctions have hurt the country’s ability to increase production, could pave the way for other OPEC members, primarily Saudi Arabia and the United Arab Emirates, to produce more, which which could lower prices.

The funded industry is expected to reveal its weekly US crude oil supply estimate later in the session.

As of 3:35 a.m. ET, futures were trading up 1.4% at $116.22 a barrel, while the contract was up 1.3% at $117.11.

Additionally, it fell 0.7% to $1,834.80 an ounce as it traded down 0.1% to 1.0726.


Comments are closed.