PARIS / LONDON (dpa-AFX) – The most important European stock markets increased moderately on Wednesday. economic data from euro zone and the UK pared gains during the day as they stoked fears of a recession. On the other hand, they allayed concerns among some investors that central banks in Europe could raise interest rates further in September.
The EuroStoxx 50 (EURO STOXX 50) ended trading 0.15 percent higher at 4266.67 points. The French CAC 40 increased by 0.08 percent to 7246.62 points. The British FTSE 100 rose 0.68 percent to 7320.53 points.
Business sentiment in the euro area and especially in Great Britain surprisingly deteriorated significantly in August. The purchasing managers’ index from S&P Global for the euro region fell to its lowest level since November 2020 and that for Great Britain to its lowest level since January 2021. “The signs of recession could hardly be clearer,” commented chief economist Thomas Gitzel from VP Bank. According to experts, the data speak against a further increase in key interest rates in the euro zone or in Great Britain. In addition, consumer sentiment in the eurozone took a surprising turn for the worse in August.
The prospect that interest rates might not rise any further for the time being boosted real estate and utility stocks and, in turn, weighed on the banking sector. The real estate sector, which has come under pressure in recent months, rose by 2.1 percent as the most sought-after industry index. The utilities sector was second, gaining 1.1 percent.
The Stoxx Europe 600 Banks, on the other hand, was down 0.3 percent after rising significantly in early trading. Banks are beneficiaries of higher interest rates because they ensure higher margins in the traditional deposit and lending business. Utilities, meanwhile, benefit from lower interest rates because they make it cheaper to finance large, expensive projects.
The accidental publication of incomplete but at first glance positive study data on the cancer drug tiragolumab caused Roche participation certificates (Roche) to rise by 3.8 percent. This put them at the top of the currency-mixed Stoxx Europe 50. Barclays analyst Emily Field expects the study to be completed successfully and the drug to be approved.
Adyen (Adyen BV Parts Sociales) stock halted its six-day sharp slide to close 1.7 percent higher. However, they had lost more than 45 percent within a week because the payment processor had shocked the market with catastrophic quarterly figures. Analyst downgrades and price target reductions followed promptly.
Bavarian Nordic (Bavarian Nordic) jumped 8.0 percent after the Danish vaccine maker’s quarterly figures. Strong figures were spoken of on the market. This was driven by the monkeypox vaccine Jynneos and a travel-related demand for vaccines./ck/stw