Consumer and tech boost European stocks amid concerns over new sanctions on Russia
European stocks rose on Tuesday, led by consumer and technology companies, while a rally in oil prices on the prospect of new sanctions against the Russian crude exporter boosted energy stocks.
The pan-European STOXX 600 index rose 0.3% and is expected to post its third consecutive session of gains, as the oil and gas sector rose 0.8% and partially offset losses in some banks and basic materials stocks. . “Today the focus is going to be largely split (between higher oil prices helping energy stocks and inflation),” said Danni Hewson, financial analyst at AJ Bell.
“But everyone is just thinking about the aftermath of the sanctions on Russia, will there really be any meaningful talks about a ban on European imports of Russian oil and coal.” The European Union will most likely adopt a new round of sanctions against Russia, while the United States was also planning new measures this week to punish Moscow for the killings of civilians in Ukraine.
Meanwhile, Tuesday’s PMI surveys showed euro zone business growth was boosted last month by the reopening of economies, but soaring energy costs and the invasion of Ukraine by Russia threaten the recovery. The STOXX 600 index has recovered about 14% from lows hit after the start of Russia’s “special military operation” in Ukraine, but is still down about 5% for the year.
“With geopolitics at the forefront of investors’ minds, the next few days could be tough and challenging for global markets,” said Lukman Otunuga, senior research analyst at FXTM. In France, opinion polls see President Emmanuel Macron winning a second term in a two-round presidential election on April 10 and 24, but far-right candidate Marine Le Pen is closing the gap.
The French CAC 40, down around 6% over the year, fell 0.4%. “Macron has been a leading figure in talks in favor of tougher sanctions. Anything that detracts from his position will affect sentiment about what Europe as a whole will do in the future and it will have an impact on the markets,” said Hewson of AJ Bell.
Among individual shares, Aareal Bank rose 3.8% after a buyout group seeking to take over the German lender in a $2.2bn deal said it had secured commitments of shareholders to offer around 37% of the shares after raising its offer price again. Danish wind turbine maker Vestas Wind jumped 9.4% after Credit Suisse upgraded the stock on its fossil fuel exit.
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