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European Markets Move Higher as Growth Fears Remain

Stock Markets Jun 24, 2022 18:50
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By Scott Kanowsky 

Investing.com -- European markets moved higher on Friday, adding to momentum from a late rally on Wall Street, but sentiment remains cautious as recent economic data points toward a potential downturn in growth.

As of 04:02 AM EST (0802 GMT), Europe's STOXX 600 index rose 0.87% to 405.90. The DAX in Germany, CAC in France, and Italy's FTSE MIB also increased.

The upticks come as headline German business confidence fell by more-than-expected to 92.3 in June, according to an Ifo institute survey, pointing to broader pessimism in the manufacturing and service sectors in Europe's largest economy.

In the U.K., the FTSE 100 index was also in the green, up 0.87% to 7,081.60, as investors shrugged off a decline in retail sales for May. Earlier in the day, U.K. consumer confidence also dropped to a record low, with market research firm GfK saying its measure of sentiment dropped 1 point to minus 41 in June.

European equity indices have received a positive handover from the U.S., as the major averages on Wall Street received late buying interest to close with solid gains on Thursday. The move came after Federal Reserve Chair Jerome Powell wrapped up his two-day testimony on the economy in Congress.

However, fears persist that aggressive monetary policy tightening by central banks around the world, aimed at curbing a recent surge in inflation, may instead spark a recession. In his testimony, Powell acknowledged that this outcome remains a possibility.

This concern partly led to Zalando SE (ETR:ZALG) issuing a second profit warning in two months, which sent shares in the German online fashion retailer sliding to an eight-year low. The company lowered its full-year projections, citing a deterioration in economic conditions.

Elsewhere, Dutch medical equipment provider Koninklijke Philips NV (AS:PHG) and health care firm Merck KGaA (ETR:MRCG) were among the top performers in the STOXX 600.

Paris-listed shares in Sanofi SA (EPA:SASY) also jumped after the French drugmaker said its COVID-19 vaccine candidate delivered 72% efficacy in adults against the Omicron strain, citing data gathered in a study.

Meanwhile, U.S. crude futures rose, along with the Brent contract. Both of the benchmarks are on course for their first back-to-back weekly losses since April, as traders try to balance worries over supply uncertainty and sliding demand spurred on by slowing economic growth in the U.S.

Additionally, gold futures fell slightly, while EUR/USD traded 0.06% higher at $1.0529.

 
European Markets Move Higher as Growth Fears Remain
 

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