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European Markets Close Higher As Stocks Rebound After Recent Big Sell-off

European stocks closed higher on Tuesday, bouncing back from losses in the previous session, even as the mood remained cautious with investors looking ahead to the Federal Reserve's monetary policy announcement.

Geopolitical concerns following Russia's troop build-up on Ukraine's border, and worries about rising coronavirus cases continued to hurt sentiment, but failed to any significantly impact market's rebound.

The Fed's latest monetary policy decision is due Wednesday afternoon. The accompanying statement could hint at the first rate hike as early as the next meeting in mid-March.

The pan European Stoxx 600 climbed 0.71%. The U.K.'s FTSE 100 surged up 1.02%, Germany's DAX advanced 0.75% and France's CAC 40 gained 0.74%, while Switzerland's SMI ended 0.54% up.

On Monday, the pan European Stoxx 600 plummeted 3.8%. The German DAX plunged 3.8%, France's CAC 40 index slumped 4% and the U.K.'s FTSE lost 2.6%, while Switzerland's SMI ended 3.84% down.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Norway, Poland, Russia, Spain, Sweden and Turkey closed with strong gains.

Ireland and Netherlands edged up marginally, while Greece, Iceland and Portugal ended weak.

In the UK market, Ocado Group, Standard Chartered, ABRDN, BP, Shell, HSBC Holdings, Natwest Group, Polymetal International, Pearson, Baclays and Lloyds Banking Group gained 3 to 5%.

M&G, Anglo American Plc, Scottish Mortgage, Rolls-Royce Holdings, ICP, Hargreaves Lansdown, B&M European Value Retail and Next also moved up sharply.

Capricorn Energy soared 6.6%. In its update on its operations and trading performance, the oil & gas exploration and development company said it is very encouraged by the initial operating performance of its newly acquired Western Desert Assets in Egypt.

Auto Trader Group declined by about 3.7%. RightMove, Aveva Group, Evraz, Barratt Developments, Coca-Cola, CRH, Reckitt Benckiser and Prudential also ended notably lower.

In the German market, Fresenius Medical Care surged up nearly 7%. Fresenius advanced 3.1%, while Munich RE, Deutsche Bank, Deutsche Telekom, HeidelbergCement, Porsche Automobil, Daimler, Henke, Deutsche Wohnen, MTU Aero Engines and Qiagen gained 1 to 2%.

HelloFresh declined 2.7%. Deutsche Boerse, Adidas, Puma, Covestro, Merck and Siemens Healthineers shed 1 to 2%.

In Paris, Unibail Rodamco climbed nearly 5%. Safran, BNP Paribas, Societe Generale, Renault, Sanofi, Technip, Orange, Thales, Credit Agricole, Veolia, Vinci and LVMH gained 1 to 2.2%.

Faurecia tumbled more than 6%. Valeo shed nearly 6%. ArcelorMittal, Atos, Teleperformance and Pernod Ricard ended lower by 1 to 1.7%.

Swedish telecommunications firm Ericsson jumped nearly 8% after reporting fourth-quarter core earnings above expectations.

In economic releases, Germany's Ifo business climate index improved to 95.7 from 94.8 in December, reaffirming better business conditions to start the year.

The UK budget balance posted its fourth biggest December shortfall on record, data released by the Office for National Statistics showed.

Public sector net borrowing excluding public sector banks declined by GBP 7.6 billion from the previous year to GBP 16.8 billion in December. However, this was the fourth-highest December borrowing since records began in 1993.

Central government receipts grew GBP 6.2 billion from the last year, while central government expenditure dropped GBP 1 billion.

In the financial year to December, the budget deficit was GBP 146.8 billion, which was the second-highest financial year-to-December borrowing since monthly records began in 1993.

The UK manufacturers expect total new order growth to slow in coming three months, reflecting an easing of domestic and export demand, the Industrial Trends Survey from the Confederation of British Industry showed on Tuesday.

A net 12% of manufacturers expect total new orders to grow in the next quarter.

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