European shares hold near 3-month highs as business activity slowdown eases | Inquirer Business

European shares hold near 3-month highs as business activity slowdown eases

/ 06:52 PM November 23, 2022

European stocks were pinned near three-month highs on Wednesday as data showed a downturn in euro zone business activity eased slightly in November, while rallying commodity shares offset losses in Credit Suisse following its profit warning.

The Europe-wide STOXX 600 index inched up 0.1 percent to its strongest level since Aug. 19. Oil and gas and mining stocks extended gains for a second session, and were up 1.3 percent each.

ADVERTISEMENT

Credit Suisse fell 5.1 percent to the bottom of STOXX 600 after the embattled Swiss lender said it expects to make a pre tax loss of up to 1.5 billion Swiss francs ($1.58 billion) for the fourth quarter.

S&P Global’s flash Composite Purchasing Managers’ Index (PMI) for the euro zone, seen as a good gauge of overall economic health, nudged up to 47.8 in November from the previous month. Economists were expecting a fall to 47 in a Reuters poll.

FEATURED STORIES

The survey, however, also showed overall demand continued to decline as consumers cut spending amid a cost of living crisis.

“The PMIs confirm that the European economy is probably already in a technical recession in the fourth quarter but they also show we’re stabilizing around the low levels and not falling off a cliff,” said Christian Stocker, lead equity strategist at Unicredit.

“It is a light recession but nothing dramatic for the earnings.”

The benchmark STOXX 600 has rallied about 14 percent from its September closing lows, aided by a better-than-expected earnings season and expectations that Federal Reserve will slow its pace of rate hikes amid signs of a cooling U.S. economy.

The Fed’s November meeting minutes, due at 1900 GMT, will offer fresh clues on the path of interest rates. Traders have currently priced in a 77 percent chance that the U.S. central bank will hike rates by 50 basis points in December.

The European Central Bank will release its own meeting minutes on Thursday. ECB Vice-President Luis de Guindos said the central bank will keep raising interest rates until it brings inflation down to around its 2 percent mid-term goal.

Kering slipped 0.8 percent in choppy trading after a report said Gucci’s creative director Alessandro Michele is leaving the Italian fashion house, owned by the French luxury group.

EMS Chemie dropped 3.8 percent after the Swiss nylon maker cut full-year earnings forecast amid worsening economic outlook.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Commodities, economy, euro zone, European stocks
For feedback, complaints, or inquiries, contact us.

Subscribe to our business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.



© Copyright 1997-2022 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.