Energy shares boost European equities ahead of inflation data

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 1, 2022. REUTERS/Staff

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  • Eurozone producer price data due at 0900 GMT
  • AMS Osram at bottom of STOXX 600 after JPM downgrade

July 4 (Reuters) – European shares rose on Mondays on gains in oil and gas companies, while investors awaited eurozone inflation data after a red-hot consumer price report last week cemented the case for an interest rate hike by the European Central Bank (ECB) ).

The continent-wide STOXX 600 index (.STOXX) was up 0.7% after falling last week on worries about a potential global economic slowdown.

UK energy giant BP Plc (BP.L) jumped 3.0% to lead gains among European oil and gas companies (.SXEP). They were followed by a 0.6% rise in travel and leisure companies (.SXTP).

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The Swiss blue-chip index SMI (.SSMI) rose 1.0% even as data showed consumer prices rose 3.4% in June, more than what economists had expected, and topped 3% for the first time since July 2008. read more

The euro zone producer price data is due at 0900 GMT, while the ECB will release the minutes of their previous rate meeting on Thursday.

“ECB minutes will certainly give a bit more color into what’s going on behind the scenes. A lot of the economic data now is coming in pretty much in-line with expectations and just kind of confirming what people were slightly worried about,” said John Woolfitt, director of trading at Atlantic Capital Markets.

“We are hopeful optimism, but we are also seeing the opportunity when the market has a big bounce up to short into those moves because they don’t to have the depth.”

Aggressive central bank moves to curtail inflation have left investors worried about the likely hit to economic growth, with the STOXX 600 down 16% so far this year. The ECB is expected to raise interest rates by 25 basis points later this month.

A gauge of eurozone lenders (.SX7E) fell 0.8% after a media report said the ECB is looking at ways to stop banks from earning windfall profits from a pandemic lending scheme once it starts raising interest rates.

Spirax-Sarco Engineering (SPX.L) rose 2.6% after the valve maker entered into exclusive talks with French private-equity firm Qualium to acquire Vulcanic Group of Companies. read more

Grafton Group (GFTU_u.L) slid 7.3% after the building materials supplier said Gavin Slark would step down as chief executive officer after 11 years in the role. read more

AMS Osram AG dropped 7.1% after JP Morgan downgraded the Austrian sensor maker’s stock to “neutral” from “overweight,” citing concerns over high debt levels and end-market exposure.

Overall, trading volumes are expected to remain lighter-than-usual due to a US market holiday.

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Reporting by Devik Jain in Bengaluru; editing by Uttaresh.V

Our Standards: The Thomson Reuters Trust Principles.


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