European equities rise as investors assess bond moves; oil stocks are lagging

The pan-European STOXX 600 index gained 0.1%. The benchmark is about 8% off its all-time high in early January.

“Bond markets (are) seen as somewhat toxic for investors at the moment, and high inflation rates are also making cash toxic, so there is no choice but to invest in stocks. for now – and working in favor is that dividends should increase over time with inflation,” said Stuart Cole, chief macroeconomist at Equiti Capital.

European automakers and cyclical sectors, including utilities and construction stocks, led the gains.

The sell-off in eurozone bond markets showed no signs of abating, with traders predicting up to four interest rate hikes from the European Central Bank in a year. [GVD/EUR]

“(The ECB) is seen as potentially opting for a softer monetary tightening path than that suggested by Fed Chairman Powell for the US, which is boosting equities…but the overall mood remains incredibly uncertain” , added Cole.

Ukraine and Russia were preparing for the first face-to-face peace talks in more than two weeks on Monday, but a senior US official said Russian President Vladimir Putin appeared unwilling to compromise to end the talks. the war.

Meanwhile, oil prices fell more than $9 a barrel after financial hub Shanghai launched a two-stage lockdown to contain a spike in COVID-19 infections. [O/R] Oil stocks plunged 2.1% to record their worst session in nearly four weeks.

Ratings agency S&P Global lowered its eurozone growth forecast for the year to 3.3% from 4.4% previously, saying war-induced energy price hikes would hurt power household purchases.

German chemicals giant BASF gained 1.6% after HSBC upgraded the stock to “buy”, saying “resilient demand” will likely help first quarter earnings.

French utility EDF fell 0.3% after saying it was expected to announce further delays and cost overruns for its Hinkley Point C nuclear power plant project due to conflict in Ukraine, supply chain disruption supply and inflation, among other reasons.

British lender Barclays fell 4.1% after disclosing a loss of around 450 million pounds ($591.80 million) on mismanaged structured products.

Carlsberg rose 3.5% after the Danish brewer announced it would leave Russia with brewing giant Heineken, joining an exodus of Western companies as pressure mounts on Moscow following its invasion of Ukraine.

(Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Editing by Uttaresh.V and Bernadette Baum)

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Felix J. Dixon