Written by Peter Norse
Investing.com – European stock markets rose on Thursday, stabilizing after losses earlier in the week, but sentiment remains fragile as investors fear the impact of monetary policy tightening as economic growth slows.
By 03:35 EDT (07:35 GMT), trading in Germany was up 0.4%, in France it was up 0.2%, and in Britain it was up 0.6%.
European stocks benefited from modest gains on Wall Street late Wednesday and in Asia overnight, but a meaningful recovery is unlikely in the near term.
UK consumer confidence slipped into negative territory for the first time since the pandemic shutdown in mid-2020, while growing more than expected in August.
Policymakers in Europe face the delicate task of balancing tackling high inflation on the back of rising energy costs and the risks of a sharp slowdown in their economies.
For now, the inflation battle is most important on their minds, with interest rates rising 75 basis points last Thursday, just weeks after moving 50 basis points, and promising several more steps over the coming months.
With this in mind, Barclays expects a recession in Europe in the first half of 2023, with the Bank of England forecasting that the eurozone economy will shrink by more than 1% during the calendar year.
In corporate news, H&M (ST 🙂 stock fell 0.5% after the world’s second-largest fashion retailer reported lower-than-expected quarterly sales, and is struggling in comparison to competitors. Inditex (BME:) numbers are strong, as shoppers tighten their belts.
Novartis (SIX:) stock fell 0.4% after the Swiss pharmaceutical giant announced that it was the subject of an investigation by the country’s competition commission over the use of patents.
THG (LON 🙂 stock fell 20% after the British online retailer issued a profit warning, saying sales will lose direction this year as the cost of living crisis weighs on consumer appetite.
Oil prices stabilized on Thursday, trading in narrow ranges after data from crude oil inventories in the United States, the world’s largest consumer, rose more than expected last week, indicating weak demand for fuel.
However, Wednesday’s report from the International Energy Agency helped balance the market, as it reported that the organization expects a large-scale shift to oil from gas for heating, saying it will average 700,000 barrels per day in October 2022 to March 2023 – double level a year ago.
By 03:35 ET (07:35 GMT), futures were up 0.2% at $88.69 a barrel, while the contract was up 0.1% at $94.18.
In addition, it was down 0.7% to $1,697.70 an ounce, while trading was down 0.1% at 0.9971.