Equities Europe: moderate gains – defensive stocks in demand

PARIS / LONDON (dpa-AFX) – After the previous day’s losses, the European stock markets stabilized on Thursday. However, the approaches remained hesitant and thus testified to the caution of market participants. The EuroStoxx 50 (EURO STOXX 50) was 0.63 percent higher at 3848.49 points around midday. The French CAC 40 increased by 0.56 percent to 6535.40 points. In the UK, the FTSE 100 fell 0.18 percent to 7547.31 points. The weakness of the oil and commodity stocks had a negative impact here.

The European stock exchanges benefited from the rising US futures. The minutes of the US Federal Reserve meeting were negative with regard to equities, but statements by Fed board member Lael Brainard had already set investors on a corresponding course on Tuesday.

The US Federal Reserve had signaled a speedy reduction in its total assets. According to the minutes of the most recent meeting of the FOMC monetary policy committee published on Wednesday, bonds worth up to 95 billion US dollars would be allowed to expire each month without having to buy new ones. “Investors should brace themselves for one of the most severe tightening streaks in US monetary policy,” noted RoboMarkets capital markets strategist Jürgen Molitor. “The Fed not only wants to speed up interest rate hikes, but also wants to reduce the central bank’s balance sheet.”

Against this background, defensive and therefore less interest-sensitive sectors such as pharmaceutical stocks were in demand. Utilities also posted above-average gains. After the so-called “Easter Package” of the German Economics and Climate Protection Minister Robert Habeck the day before, the British have now also presented their energy plans. The experts at the investment bank Goldman Sachs consider it positive for names like RWE, Orsted and Iberdrola (Iberdrola SA) that the expansion of renewables from wind to solar to hydrogen is being stepped up. In the wind power sector, expert Ajay Patel named Vestas (Vestas Wind Systems AS) in particular as a beneficiary of faster and larger investments in offshore plants. Vestas gained 1.7 percent.

Meanwhile, the specifications from Samsung are supporting the semiconductor sector. In its earnings outlook for the first quarter of 2022, the market leader in memory chips, smartphones and televisions expects operating profit to increase by 53 percent year-on-year. ASML (ASML NV) climbed 1.4 percent, STMicro (STMicroelectronics) advanced 1.6 percent.

Meanwhile, the stabilized oil price did little for the energy sector. Here, the heavyweight Shell (Shell (ex Royal Dutch Shell)) had a negative impact. The oil company has to write off billions for its withdrawal from Russia. In the course of Russia’s attack on Ukraine, the group decided in early March to discontinue its business activities in Russia. In the first quarter, write-downs of four to five billion US dollars (up to 4.6 billion euros) will be incurred.

Among the individual stocks, VINCI stood out with a gain of 1.8 percent. The British investment bank Barclays had described the value as the new favorite in the infrastructure segment, not least because of low debt and low dependence on rising consumer prices

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