European shares climb as robust US data soothes recession jitters
The graph of the German stock index DAX at the Frankfurt stock exchange is shown in the image provided by Reuters.
Written by Amruta Khandekar and Matteo Allievi
European stocks rose on Wednesday following strong economic data from the United States, easing worries of a significant downturn. Investors were also eagerly awaiting statements from central bank officials at a forum later in the day, in hopes of gaining more insight into future policies.
The all-inclusive European indicator rose by 0.6% at 0826 GMT, following the previous night's progress in Wall Street.
A plethora of information presented on Tuesday indicated an increase in new orders for important capital goods manufactured in the United States, as well as an upsurge in consumer confidence. This positive data brought about an improvement in sentiment, which had been dampened in recent times due to worries about the possibility of a significant decline in the global economy caused by further tightening of monetary policies.
Investors are closely monitoring a panel conversation among central bank officials in Sintra, which involves the presence of ECB President Christine Lagarde, Fed Chair Jerome Powell, BOJ Governor Kazuo Ueda, and BOE Governor Andrew Bailey.
Lagarde's remarks, which exhibited a strong and aggressive stance, raised worries that worldwide interest rates might remain high for a longer duration than initially anticipated.
According to Pierre Veyret, ActivTrades' technical analyst, it is now widely expected that there will be a significant increase in interest rates due to their strong impact. It is crucial to observe the timing and magnitude of these rate hikes.
"If Jerome Powell and Andrew Bailey succeed in altering their attitude or offering additional hints that indicate a more accommodative stance, then we can anticipate a genuinely unexpected outcome."
Almost every significant industry in Europe experienced profitable trading.
Sage Group (LON:) Plc's stocks experienced a significant increase of 4.1%, reaching their highest point in 23 years. This surge was motivated by J.P. Morgan's decision to improve their rating on the company's stock, upgrading it from "neutral" to "overweight".
The stocks of ASML Holding, a company that manufactures chip equipment, increased by 1.3% in early trading. Similarly, Nordic Semiconductor experienced a significant jump of 2.7%. Consequently, the technology industry stood out as one of the leading sectors in Europe to gain positive momentum.
The attention shifted towards semiconductor stocks following a report that indicated the United States is contemplating additional limitations on the export of AI chips to China.
Additionally, pushing up the STOXX 600, Roche Holding (traded over-the-counter) experienced a 1.6% increase in its stock value as the American health regulator rejected the approval of Regeneron's Eylea medication.
A recent survey conducted by the GfK institute revealed that consumer confidence in Germany is expected to decrease in July primarily as a result of diminishing economic and income prospects. Additionally, investors are closely monitoring the release of consumer price information from Italy, scheduled for later today.
Carrefour, a renowned retail company based in France (EPA:), experienced a 3.4% increase in its stock value following the initiation of coverage by Morgan Stanley (NYSE:), who provided a positive "overweight" rating.
Siemens Energy experienced a surge of 4.6% in their stock prices after a significant decline in the previous week, prompted by the revelation of issues within their wind turbine department.
