European Stocks Close Higher For 2nd Straight Day

(RTTNews) - European stocks closed higher on Thursday, moving up for a second straight session, as investors continued to react to corporate earnings updates and largely shrugged off geopolitical concerns and worries about inflation.

A warning from the World Bank that a "human catastrophe" is unfolding due to a rising food crisis across the world triggered by the Russian invasion of Ukraine hurt sentiment, but did not trigger any significant sell-off in the markets.

The UK market underperformed as shares of mining companies fell after underwhelming product updates.

Amid significant uncertainty to growth outlook, investors awaited comments from the central bank holy trinity of Fed chair Jay Powell, ECB president Christine Lagarde and Bank of England governor Andrew Bailey.

ECB vice president Luis de Guindos said in an interview published today that the central bank should end its stimulus program in July and raise rates that same month, in September or later.

The pan European Stoxx 600 advanced 0.32%. Germany's DAX climbed 0.98% and France's CAC 40 surged up 1.36%, while the U.K.'s FTSE 100 and Switzerland's SMI edged down 0.02% and 0.07%, respectively.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Norway, Spain, Sweden and Turkey closed higher.

Denmark, Poland, Portugal and Russia ended weak, while Iceland closed flat.

In the UK market, ITV and IAG both ended stronger by over 6%. Royal Mail, Smith & Nephew, Melrose Industries, Rolls-Royce Holdings, Pearson, Burberry Group, Aveva Group, Bunzl, Mondi, British Land Co., NEXT, WPP and DCC moved up 2 to 5%.

Anglo American Plc plunged 8.8% after slashing its production outlook. Antofagasta ended 7.1% down and Glencore shed 5.6%. BHP declined sharply after cutting its annual copper production view.

BAE Systems, Endeavour Mining, Rio Tinto and National Grid also ended sharply lower.

In France, Faurecia, Valeo, Accor, Safran, Legrand, Saint Gobain, Vinci, ArcelorMittal and Renault gained 3 to 5%. Unibail Rodamco, Schneider Electric, Veolia, BNP Paribas, Kering, Societe Generale, L'Oreal and Air France-KLM moved up 2 to 2.8%.

Alstom climbed 3.4% after it won largest light rail contract in Australia to deliver Next Generation Trams for Melbourne, Victoria.

In the German market, Sartorius surged up more than 4% after confirming its 2022 outlook. MTU Aero Engines rallied 3.5%, while Continental and Siemens both ended higher by nearly 3%. Bayer, Covestro, Deutsche Wohnen, BASF, SAP, Deutsche Bank and HeidelbergCement gained 1.3 to 2%.

In economic news, final data from Eurostat showed Eurozone inflation accelerated sharply, but less than initially estimated, to set a record high in March underpinned by surging energy prices.

Consumer price annual inflation jumped to 7.4% from 5.9% in February. Although the rate was revised down slightly from the flash estimate of 7.5%, it was the strongest on record.

Core inflation, which excludes prices of energy, food, alcohol and tobacco, accelerated to 2.9% from 2.7% a month ago. Core inflation was also revised down by 1 percentage point from 3%. The current inflation figure is more than triple the European Central Bank target of 2%. .

The ECB expects food and energy prices to keep climbing in the months ahead. The central bank has projected inflation to stay elevated for longer than earlier expected.

Headline inflation is expected to peak at over 8% and average around 7% in the year as a whole, Jack Allen-Reynolds, an economist at Capital Economics, said. As rising inflation will put a dent in consumer spending, the year 2022 will be a year of stagflation for the eurozone, the economist added.

Preliminary figures from the European Commission showed Euro area consumer confidence unexpectedly improved in April, after falling sharply in the previous month, yet remained in the negative territory indicating pessimism.

The flash consumer confidence index rose to -16.9 from -18.7 in March, which was the weakest since May 2020 shortly after the coronavirus pandemic began. Economists had forecast a score of -20. The corresponding index for the EU climbed 2.0 points to -17.6.

Survey results from the statistical office Insee showed France manufacturing confidence rose slightly in April underpinned by the improvement in order books. The manufacturing confidence index unexpectedly rose to 108 in April from a 5-month low of 107 in March. The score was forecast to fall to 105.