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Europe Gains As Recovery Confidence Grows

Europe Gains As Recovery Confidence Grows

By Administrator_India

Capital Sands

European stock markets edged higher Wednesday, amid continued optimism of an economic recovery even amid concerns of a potential second wave of COVID-19 cases.

At 4 AM ET (0800 GMT), the DAX in Germany traded 0.6% higher, France’s CAC 40 rose 0.9%, the U.K.’s FTSE index was up 0.8%.

On Wednesday, European car sales showed first signs of a tepid recovery in May, with passenger vehicle registrations falling 57% year-over-year. While that’s the worst May since the European Automobile Manufacturers Association started tracking the data in 1990, it was an improvement over the 78% plunge in April.

This follows a strong rebound in U.S. retail sales in May and an improvement in the German ZEW confidence indices on Tuesday.

Inflation figures from the U.K. were less impressive, as consumer prices increased just 0.5% from a year earlier, the weakest since 2016, amid falling prices of auto fuel and recreational goods.

However, gains were limited amid worries about a potential second wave of the Covid-19 virus as Beijing shut its schools and entertainment venues and cancelled hundreds of domestic flights on Wednesday, ramping up attempts to contain an outbreak that has triggered fears of renewed wider contagion.

In corporate news, HSBC  gained 1% after the banking giant was reported to be on the verge of resuming a massive redundancy plan it had put on ice following the outbreak of coronavirus, according to a memo seen by Reuters.

The U.K.-based, Asia-focused bank plans to cut 35,000 jobs over the medium term, around 15% of 235,000 staff worldwide.

In other news, U.K. online fashion house boohoo.com , one of the biggest winners of the pandemic in Europe, rose 9.3% to a new record high after it promised to take advantage of the many acquisition opportunities it expects from the recession. The company announced the acquisition of IP rights to the Oasis and Warehouse brands Wednesday for a mere 5.25 million pounds. It still expects revenue growth to slow to 25% this year, however.

Also in London, bookmaker William Hill  dropped 4.5% after raising 224 million pounds in new equity at a price of 128 pence, 8% below Tuesday’s closing price.

Oil prices traded mixed, after the American Petroleum Institute predicted late Tuesday another rise in U.S. crude stocks.

API reported a 3.9 million-barrel build for the week ending June 12. The Energy Information Administration publishes its weekly crude oil inventories data at 10:30 AM ET (14:30 GMT). Crude inventories are seen falling 152,000 barrels after a build of 5.7 million barrels in the previous week. OPEC will also present its monthly update on the world oil market.

At 4:05 AM ET, U.S. crude futures traded 0.4% lower at $38.24 a barrel. The international benchmark Brent contract rose 0.1% to $40.99.

Elsewhere, gold futures dropped 0.3% to $1,731.85/oz, while EUR/USD traded at 1.1270, up 0.1%.

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