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Aug 11 (Reuters) – European stocks rose slightly on Thursday after a strong rally in the previous session on signs of slowing inflation in the United States, while Aegon rose after the Dutch insurer raised its forecast for the year as a whole.
The pan-European STOXX 600 index (.STOXX) rose 0.1%, after posting its best session in nearly two weeks on Wednesday on bets that the weaker-than-expected inflation reading will encourage the Federal Reserve to become less aggressive on interest rate hikes. Read more
“Markets are rising on the fact that the peak has passed in terms of inflation in the United States,” said Sebastian Paris-Horvitz, director of research at La Banque Postale Asset Management.
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Gains were limited by losses in the miners (.SXPP), down 0.7% and the main sector decline on weak results from Antofagasta (ANTO.L). Shares in the company fell 1.3% and dragged peer Rio Tinto (RIO.L) down 3.8%. Read more
The STOXX 600 is down about 9% so far this year, compared to a decline of more than 11% for Wall Street’s S&P 500 Index (.SPX). US equities are heavily dependent on movements in big tech stocks, which fell sharply in the first half of the year on concerns about rising interest rates.
“The sharp drop in global markets in the first quarter was associated with the fall of these large growth stocks in the United States, and therefore Europe, which is less heavy on these, outperformed”, added Paris- Horvitz.
Yet Europe is grappling with the fallout from the war in Ukraine as it seeks to source energy from non-Russian sources.
Germany, often referred to as the economic engine of the European Union, is also struggling with low rainfall. Low water levels on the Rhine, Germany’s trade artery, have disrupted shipping and increased freight costs fivefold. Read more
Among other stocks, Aegon (AEGN.AS) climbed to the top of the STOXX 600 with an 8.2% gain after raising expectations for full-year working capital generation and 2021 free cash flow. -2023. Read more
The European insurance sector index (.SXIP) rose 0.8% in early trading and was among the top gainers.
Zurich Insurance Group (ZURN.S) also gained 1.7% as it posted a better-than-expected rise in first-half operating profit. Read more
Siemens (SIEGn.DE) fell 1.5% after the engineering and technology group said a writedown at Siemens Energy (ENR1n.DE) led to its first quarterly loss in nearly 12 years. Read more
Deutsche Telekom (DTEGn.DE) gained 0.9% as it raised its full-year outlook for the second time and posted quarterly core profit that beat estimates. Read more
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Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila
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