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The European market ends higher, but recession fears limit gains

European shares rose on Monday, with the oil and gas sector posting its best session in two months, but negative investor sentiment in the euro zone capped gains ahead of the European Central Bank’s (ECB) plan to start raising interest rates this month.

The pan-European STOXX 600 index closed down 0.54% at 409.31 after falling last week on concerns of a potential global economic slowdown. Trading volumes were lower on Monday due to the US holiday.

London-listed oil giants BP Plc and Shell and France’s TotalEnergies jumped from 4.4% to 4.6%. They provided the biggest boost to the STOXX 600 after supply concerns helped lower OPEC production, tensions in Libya and sanctions against Russia lift oil prices.

Declines in the real estate, auto and technology sectors limited gains.

A Sentix survey released on Monday showed eurozone investor confidence fell this month to its lowest level since May 2020, pointing to an “inevitable” recession in the 19-nation currency bloc.

Meanwhile, producer prices in the region, according to separate data, increased less than expected. This came after consumer inflation hit a record high and strengthened the possibility of an interest rate hike by the ECB.

Investors will now watch for the release of minutes from the ECB’s latest monetary policy meeting on Thursday.

  • In London, the Financial Times index rose by 0.89% to 7,232.65 points;
  • In Frankfurt, the DAX index decreased by 0.31% and made 12773.38 points;
  • In Paris, the CAC-40 index increased by 0.40% and made 5954.65 points;
  • In Milan, the Ftse/Mib index depreciated by 0.05%, reaching 21343.93 points;
  • In Madrid, the Ibex-35 index registered a decrease of 0.17% to 8161.80 points;
  • In Lisbon, the PSI20 index increased by 0.04%, reaching 6054.21 points.

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