Rebound in oil stocks lifts European shares

That followed remarks this week from other ECB officials that suggested the central bank could slow its pace of rate hikes. Italy's blue-chip index rose 0.4% after the new right-wing government signed off on its first budget, a 35 billion euros ($35.84 billion) package focusing on curbing sky-high energy bills and cutting taxes from next year for payroll workers and the self-employed.


Reuters | Updated: 22-11-2022 16:27 IST | Created: 22-11-2022 16:21 IST
Rebound in oil stocks lifts European shares
Representative Image Image Credit: Piqsels

European shares rose on Tuesday, supported by a recovery in oil stocks after a rout in the previous session as investors weighed mixed signals from central bank policymakers on the path of interest rate hikes.

The pan-European STOXX 600 index rose 0.4% to hover near its strongest levels in over two months. Oil and gas stocks climbed 3.6%, set to recoup Monday's losses, as crude prices rose after Saudi Arabia's energy minister denied a report that suggested the OPEC+ group was considering an increase in supply.

Miners gained 2.0% after dropping 1.6% in the previous session due to worries about surging COVID-19 cases in China. However, outside of the commodities space, gains were limited as investors looked for clues on the Federal Reserve's rate hiking plans from the November policy meeting minutes to be released on Wednesday.

"Equity investors need to brace themselves for the Fed to say it is likely to keep raising rates to tame inflation, even though October's consumer prices figure was below expectations," said Russ Mould, investment director at AJ Bell. "Investors may have got carried away by the recent inflation surprise which triggered a rally in stocks around the world. Tomorrow could feel like a bucket of cold water has been poured on this rally."

Meanwhile, ECB policymaker Robert Holzmann backed a third straight 0.75 percentage point rise in the deposit rate for the next rate-setting meeting in December, according to a Financial Times report. That followed remarks this week from other ECB officials that suggested the central bank could slow its pace of rate hikes.

Italy's blue-chip index rose 0.4% after the new right-wing government signed off on its first budget, a 35 billion euros ($35.84 billion) package focusing on curbing sky-high energy bills and cutting taxes from next year for payroll workers and the self-employed. It will now go to parliament, which must pass it by the end of the year.

"In our view, the budget is based on a conservative and sustainable approach to public finance," Equita analyst Luigi De Bellis wrote in a note. Among individual stocks, Enel rose 1.1% after Italy's biggest utility company said it plans asset sales worth 21 billion euros ($21.51 billion) to reduce net debt.

Prosus slid 2.1% after the Dutch tech investor said it expects earnings for the six months to Sept. 20 to have dropped by at least 79.9% from the same period last year.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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