UPDATE 1-European shares slip as business activity data underwhelms

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EZ Jan’s business activity returns to growth – PMI


Swatch Group rises, says positive for China recovery


Norwegian salmon farmers jump at hopes of tax cuts

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Surti Shankar

(Reuters) – European stocks rallied early on Tuesday after better-than-expected business activity data in the euro zone failed to attract investors worried about further interest rate hikes by the European Central Bank (ECB). reversed the rise of

The Europe-wide STOXX 600 index fell 0.1%, despite a strong finish on Wall Street as the bruised tech stocks continued to rally.

The S&P Global Flash Composite Purchasing Managers Index (PMI) rose to 50.2 this month from 49.3 in December.

The Bloc’s dominant service index also surprised with an upturn, but factory activity still declined.

“Manufacturing contraction may be the lowest in five months, but the sector is still contracting,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdowne. .

“At a time when the hawkish ECB is preparing to raise rates further, investors are realizing that this is progress, but there is still a long way to go.”

European stock markets hit a nine-month high last week on hopes that the European recession will ease and interest rate hikes by the Federal Reserve will slow.

But hawkish comments from ECB policymakers helped cement bets on a 50-basis-point rate hike at each of its next two meetings, one scheduled for next week. .

The central bank is raising interest rates at the fastest pace on record, but has so far failed to bring inflation closer to its 2% target.

Logitech International rose 2.0% on Tuesday, confirming preliminary results after the computer peripheral maker announced a 22% drop in third-quarter sales.

The Swatch Group surged 1.6% after reporting a 2.5% increase in sales in 2022 as the Swiss watchmaker was positive about the Chinese market’s recovery.

Shares of Norwegian salmon farmers SalMar and Mowi rose 6.2% and 2.8%, respectively, above the STOXX 600.

Traders pointed to media reports suggesting an adjustment to the center-left government’s proposed salmon tax hike. (Reporting by his Sruthi Shankar in Bangalore; Editing by Savio D’Souza and Shinjini Ganguli)

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