European Stocks Close Sharply Higher As Bargain Hunting Continues

Despite persisting worries about inflation, European stocks extended gains from the previous session and closed higher on Wednesday as investors continued to indulge in some hectic bargain hunting after recent sharp losses.

Data from the Labor Department showed the annual rate of consumer price growth in U.S. slowed by less than expected, coming in 8.3% in April after having accelerated to 8.5% in March. Economists had expected the pace of growth to slow to 8.1%.

The annual rate of growth in core consumer prices also slowed to 6.2% in April from 6.5% in March, although the rate was expected to decelerate to 6%.

On a monthly basis, the Labor Department said its consumer price index rose by 0.3% in April after surging by 1.2% in March. Economists had expected prices to edge up by 0.2%.

Shares of energy firms rose sharply after crude oil prices climbed higher.

The pan European Stoxx 600 gained 1.74%. The U.K.'s FTSE 100 gained 1.44%, Germany's DAX surged up 2.17% and France's CAC 40 jumped 2.5%, while Switzerland's SMI ended roughly flat.

Among other markets in Europe, Austria, Belgium, Finland, Ireland, Netherlands, Norway, Portugal, Spain and Sweden posted strong gains.

Greece and Iceland closed modestly higher. Denmark, Russia and Turkey closed weak, while Czech Republic and Poland ended flat.

In the UK market, Compass Group and Prudential climbed 7.4% and 6.7%, respectively. Pershing Square Holdings, Glencore, Burberry Group, Entain, Rio Tinto, Shell, BP, Flutter Entertainment, IHG, Anglo American Plc, 3I Group, Antofagasta, Standard Chartered and Whitbread gained 3 to 5%.

ITV gained 2.3% after the broadcaster delivered another strong quarter amid robust operational and financial performance. Travel and tourism company TUI AG soared 5.7% after saying it returns to profit this year.

Rolls-Royce Holdings, RightMove, Barclays, Ferguson, IAG, Land Securities, CRH, British Land, St. James Place and Ashtead Group also rallied sharply.

Ocado Group and Airtel Africa shed 3.45% and 3.3%, respectively. AstraZeneca, BunzL, Admiral Group, Smurfit Kappa Group and Mondi lost 1 to 2.2%.

In the French market, Faurecia, Accor, L'Oreal, Valeo, Pernod Ricard, ArcelorMittal, Veolia, LVMH, Kering, Societe Generale and Safran gained 3 to 5.2%.

STMicroElectronics, BNP Paribas, Sodexo, Airbus Group, Engie, Unibail Rodamco and Hermes International also ended sharply higher.

In Germany, Allianz moved up more than 6% after it added another €1.9bn to provisions against its imploded Structured Alpha hedge fund.

BMW, Adidas, Munich RE, Puma, E.ON, Vonovia, Deutsche Wohnen, Continental, MTU Aero Engines, Infineon Technologies and Volkswagen gained 3 to 5.3%.

German industrial heavyweight Thyssenkrupp surged 11.2% after raising its outlook for sales and operating profit for 2022.

Bayer tumbled more than 6% after reports that the Biden administration asked the U.S. Supreme Court not to hear the company's bid to reject customers' claims that its Roundup weedkiller causes cancer.

Swedish Match soared almost 9% after Marlboro-maker Philip Morris International Inc confirmed it was in talks to buy the Swedish firm.

In economic news, Germany's consumer price inflation hit a record high as estimated in April, final data from Destatis showed.

Consumer price inflation rose to 7.4% in April from 7.3% in March. The inflation rate hit an all-time high since German reunification and also came in line with the flash estimate published on April 28.

Destatis cited the development in energy prices as the one of the major cause for the record increase in overall prices. The above average increase in food prices also lifted consumer prices.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT