Chemical, commodity shares drive gains in European stocks

European equities extended gains on Tuesday, helped by chemical and commodity-linked sectors, as last week's brutal selloff on recession fears attracted investors looking for bargains. The pan-European STOXX 600 index rose 1%, stretching gains to a third session after hitting a more than one-year low last week.


Reuters | Updated: 21-06-2022 14:55 IST | Created: 21-06-2022 14:38 IST
Chemical, commodity shares drive gains in European stocks
Representative image Image Credit: Piqsels

European equities extended gains on Tuesday, helped by chemical and commodity-linked sectors, as last week's brutal selloff on recession fears attracted investors looking for bargains.

The pan-European STOXX 600 index rose 1%, stretching gains to a third session after hitting a more than one-year low last week. Miners rebounded 2.1% after touching December 2021 lows in the previous session, while oil and gas stocks rose 1.1% as crude prices rose the prospect of tight supplies of crude and fuel products.

Boosting chemical stocks, French industrial gas company Air Liquide climbed 3.4% after striking its largest power purchase deal with Swedish utility Vattenfall. The European benchmark shed 4.6% last week, its worst weekly performance since early March, after interest rate hikes in the United States, Switzerland and Britain fuelled fears that aggressive tightening by major central banks would spark a recession.

"When we think of the weak equity sentiment in response to hawkish central banks and weaker growth picture, not a lot has changed from last week," said Karim Chedid, head of the investment strategy for iShares EMEA at BlackRock. "I do question how long this reprieve can last."

European Central bank President Christine Lagarde reaffirmed on Monday plans to raise the ECB's interest rates twice this summer, while fighting widening spreads in the borrowing costs of different eurozone countries. The focus will be on Federal Reserve Chairman Jerome Powell's testimony before the Senate and the House as well as European business activity and UK inflation data later this week.

French planemaker Airbus rose 1.2% after British airline EasyJet said it would buy 56 Airbus A320neo aircraft. Ocado dropped 4.6% after the British online supermarket and technology group said it would boost its liquidity by over $1 billion to fund its growth.

Spanish power utilities such as Iberdrola, Endesa, and Naturgy fell about 2% each on news the country's government was readying a new tax on electricity utilities' profits, which have been boosted by energy prices.

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

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