European Stocks Recover In The Final Hour, But Still Close On Weak Note

After a weak start and a subsequent long spell in negative territory, European markets staged a recovery past mid afternoon on Monday but still ended the session mostly lower.

The mood remained cautious with investors looking ahead to the policy meetings of several central banks, including the Federal Reserve, the Bank of England, Swiss National Bank, the People's Bank of China and the Bank of Japan due this week.

The Fed is widely expected to announce another 75-basis point hike in interest rates to rein in inflation.

The Bank of England meets on Thursday, with markets split on whether the central bank will raise rates by 50 or 75 basis points ahead of a mini budget to be unveiled by the new Chancellor of the Exchequer Kwasi Kwarteng on Friday.

Other central banks are also likely to significantly raise their benchmark rates.

The pan European Stoxx 600 edged down 0.09%. Germany's DAX gained 0.33% and Switzerland's SMI edged up 0.06%. France's CAC 40 ended lower by 0.26%. The U.K. market remained closed for a holiday.

Among other markets in Europe, Austria, Ireland and Poland closed higher.

Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Norway, Sweden and Turkiye drifted lower, while Netherlands, Portugal, Russia and Spain ended flat.

In the German market, Porsche Automobil rallied more than 4%. Brenntag, Covestro, BASF, MTU Aero Engines, BMW and Adidas gained 2 to 3.5%.

Volkswagen gained a little over 1%. The German automaker is seeking to raise nearly 9.4 billion euros ($9.41 billion) from the initial public offering of its iconic sports-car maker Porsche AG.

Infineon Technologies, Merck, Daimler, Deutsche Telekom and Siemens also ended notably higher.

Sartorius, Fresenius, Vonovia, Zalando, Fresenius Medical Care and HelloFresh shed 1 to 2.3%.

In Paris, Atos climbed more than 6%. Airbus Group, STMicroElectronics, Dassault Systemes, Air France-KLM, WorldLine, Thales and Pernod Ricard gained 1 to 2.5%.

On the economic front, Eurozone construction output expanded for the first time in five months in July, preliminary data from Eurostat showed.

Construction output rose 0.3% month-over-month in July, reversing a 1.2% decrease in June, which was revised from the 1.3% fall seen in the previous estimate.

On a yearly basis, growth in construction output improved to 1.5% in July from 1.3% in June. The rate for June was revised up notably from 0.1%.

There are increasing signs that the German economy is slipping into a recession, Bundesbank said in its monthly report released.

Real gross domestic product is likely to decline somewhat in the current quarter and shrink significantly in the winter months, the central bank said.

The bank cited the extremely tense situation in the energy supply after the war in Ukraine as the major reason for the current weakness.

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