European Stocks Higher; Uniper Exhausts Credit Line
2022.08.30 11:18
By Peter Nurse
Investing.com – European stock markets traded higher Tuesday, rebounding after the negative start to the week as Chinese authorities pledged to stimulate the world’s second-largest economy.
By 03:45 ET (07:45 GMT), the DAX in Germany traded 0.9% higher, the CAC 40 in France rose 0.9%, and U.K.’s FTSE 100 climbed 0.7%, returning after the long U.K. weekend.
China will step up measures to boost demand and stabilize employment and prices in the second half of the year to optimize economic outcomes, the country’s finance ministry said on Tuesday, as policymakers strive to prop up faltering growth.
These comments followed a package of new economic stimulus measures announced by China’s cabinet last week, including billions of dollars worth of policy financing.
News that the Chinese authorities are attempting to boost their country’s economy marks a contrast with the tightening monetary policies seen through most of the rest of the world.
Federal Reserve Chair Jerome Powell struck a hawkish tone at the Jackson Hole conference last week, suggesting that the U.S. central bank would not flinch in tightening credit to rein in inflation, even at the onset of recession.
Powell’s comments were echoed by European Central Bank board member Isabel Schnabel over the weekend, stating that central banks must act aggressively to tackle rising inflation.
With this in mind, investors will be looking at this week’s data to gauge if the recession fears around the world are justified.
Eurozone consumer confidence data for August are due later in the session and consumer inflation follows on Wednesday, but most eyes will be on Friday’s monthly U.S. jobs report, and markets may not like a strong number if it supports the basis for a continuation of aggressive interest rate hikes.
In corporate news, Uniper (ETR:UN01) stock fell 2.2% after the German energy company said on Monday it has now fully exhausted the 9 billion euro ($9 billion) credit line it got as part of its recent bailout, due to the latest spike in natural gas prices.
Adevinta (OL:ADEA) stock surged 13% after the world’s largest classified ads company reported quarterly results with core markets revenues up 10% year-on-year.
Oil prices edged higher Tuesday, continuing the previous session’s hefty gains, as attention turns to the upcoming OPEC+ meeting and potential supply cuts.
The Organization of the Petroleum Exporting Countries, Russia, and allies, a group called OPEC+, is set to meet on Sept. 5, and Saudi Arabia last week raised the possibility of cutting output to offset any major decline in crude rates.
By 03:45 ET, U.S. crude futures rose 0.6% to $97.58 a barrel, while the Brent contract fell 0.5% to $103.40. Both benchmarks posted gains of over 4% on Monday, the biggest increase in more than a month.
Additionally, gold futures fell 0.3% to $1,744.45/oz, while EUR/USD traded 0.3% higher at 1.0024.
