European Markets Advance On Monday
The major European markets found support on Monday, shrugging off weakness from last week that were fueled by worries about a recession and bets of bigger interest-rate hikes from major central banks. The rally was fueled by European Central bank President Christine Lagarde, who reaffirmed on Monday that the ECB will hike interest rates by 25 basis points twice this summer to fight inflation. Investors had worried that sharper rate hikes might be on the docket, sparking recession concerns.
Investors also await a congressional appearance by U.S. Federal Reserve Chair Jay Powell this week that could highlight the U.S. central bank's resolve to guide inflation back to the Fed's 2 percent target. For the day, Germany's DAX jumped 139.34 points or 1.06 percent to finish at 13,265..60, London's FTSE spiked 105.56 points or 1.50 percent to close at 7,121.81 and the CAC 40 in France gained 37.44 points or 0.64 percent to end at 5,920.09.
In Germany, MTU Aero Engines surged 5.29 percent, while RWE soared 3.74 percent, Continental spiked 3.73 percent, Deutsche Bank jumped 2.79 percent, Deutsche Telekom advanced 2.37 percent, Volkswagen improved 1.51 percent, Daimler Truck gained 1.25 percent, Deutsche Post dropped 0.99 percent, Heidelberg Cement sank 0.92 percent and Deutsche Borse was up 0.49 percent. In London, Persimmon plummeted 4.46 percent, Roll-Royce surged 4.32 percent, Shell spiked 3.25 percent, Associated British Foods jumped 2.39 percent, British American Tobacco climbed 2.34 percent, Scottish Mortgage Investment advanced 1.88 percent, Rightmove gathered 1.51 percent, Vodafone gained 0.60 percent, St. James Place dipped 0.27 percent and Tesco was up 0.08 percent.
In France, Accor soared 3.17 percent, Thales jumped 2.76 percent, Compagnie de Saint-Gobain plunged 3.99 percent, Credit Agricole improved 2.44 percent, Societe Generale collected 2.38 percent, Carrefour gained 1.86 percent, Vivendi slumped 1.83 percent, Sanofi strengthened 1.53 percent, BNP Paribas perked 1.27 percent and Danone was up 0.10 percent. In economic news, Eurozone construction output declined for the first time in four months in April, due to a sharp contraction in the civil engineering sector, data from Eurostat showed on Tuesday. Construction output dropped 1.1 percent in April, reversing a 0.1 percent increase in March, which was revised from a nil growth seen in the previous estimate.
Also, UK property prices rose to a new record for the fifth consecutive month in June but a slowdown in price growth is expected for the coming months, property website Rightmove said Monday. Property prices rose only 0.3 percent on month, the slowest increase since January, as the pace of price growth started to slow. German producer price inflation rose to a fresh record high in May, driven by energy prices, data from Destatis showed on Monday.
Producer prices logged a double-digit growth of 33.6 percent year-on-year in May, following April's 33.5 percent increase.
The rate was forecast to grow again by 33.5 percent.
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