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European Stocks Higher; China’s COVID News, Spanish Inflation in Focus

European Stocks Higher; China's COVID News, Spanish Inflation in Focus
© Reuters

By Peter Nurse 

Investing.com – European stock markets traded higher Monday, helped by gains in Asia as major Chinese cities begin to ease mobility restrictions even as elevated Spanish inflation increased the pressure on the European Central Bank.

By 4:10 AM ET (0810 GMT), the DAX in Germany traded 0.8% higher, the CAC 40 in France rose 0.9%, while the U.K.’s FTSE 100 climbed 0.5%.

Equity markets in Europe received a positive handover from Asia, with both the Nikkei in Japan and Hong Kong’s Hang Seng up over 2%, boosted by the news that curbs on movement in key regions of China were loosened over the weekend.

Shanghai is aiming to exit a two-month COVID lockdown on June 1, while Beijing reopened some parts of public transport on Sunday as well as some malls as infections stabilized.

Strict movement restrictions in key Chinese cities have severely hit the nation’s economy, the second largest in the world and a key export market for a number of European companies.

That said, gains are likely to be limited Monday with the U.S. on holiday and after Spanish annual consumer inflation unexpectedly rose to 8.7% in May up from 8.3% the previous month. 

Tuesday sees the release of the latest Eurozone inflation flash estimate, which is expected to hit another record high of 7.7% in May, up from 7.4% in April, although the Spanish data points to further upside. A hefty move higher would largely cement expectations for policy normalization at the ECB, starting in the summer.

In corporate news, S4 Capital (LON:SFOR) stock rose 2.3% after the ad group reported a substantial rise in first-quarter gross profit and reiterated its full-year outlook, saying it expected robust demand despite forecasts of slowing global economic growth. 

Ted Baker (LON:TED) stock climbed 2.5% following a report that Juicy Couture owner Authentic Brands is nearing a 300 million pound ($379.35 million) deal for the U.K. fashion house.

Oil prices climbed Monday, trading at new two-month highs even though the European Union’s plans to impose an oil embargo on Russia appeared on the verge of collapse on Monday, ahead of a summit meeting of member states’ leaders later in the day.

Any deal needs the unanimous backing of member states to come into effect and continues to be resisted by Hungary and, to a lesser extent, Czechia and Slovakia. 

Any further ban on Russian oil would tighten a crude market already strained for supply amid rising demand as the peak summer demand season in the United States and Europe draws near.

By 4:10 AM ET, U.S. crude futures traded 0.9% higher at $116.10 a barrel, while the Brent contract rose 1% to $116.64.

Additionally, gold futures rose 0.3% to $1,856.65/oz, while EUR/USD traded 0.2% higher at 1.0751.

 

Source: Investing.com

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