European Stocks Higher; Thyssenkrupp Shines With 1Q Earnings

© Reuters

By Peter Nurse

AiVIF.com - European stock markets traded higher Wednesday, helped by solid corporate earnings and ahead of the release of key U.S. inflation data which could influence how aggressively the Federal Reserve raises interest rates.

By 3:50 AM ET (0750 GMT), the DAX in Germany traded 0.2% higher, the CAC 40 in France rose 0.7%, and the U.K.’s FTSE 100 climbed 0.4%.

European equities rebounded Wednesday after recent losses on concerns that soaring inflation will prompt central banks and the Fed, in particular, to boldly hike interest rates, increasing the potential for a global recession.

Helping the tone were solid European corporate earnings, strong numbers from Thyssenkrupp (ETR:TKAG) being the highlight.

Its stock rose 6% after the German conglomerate raised its outlook for sales and operating profit for 2022, as it benefited from higher selling prices for steel and materials, adding that it aims to return to paying dividends and generate positive cash flows.

Allianz (ETR:ALVG) stock rose 2.5% after the German financial giant booked another 1.9 billion euro charge against its imploded Structured Alpha hedge fund, hoping to draw a line under this episode.

Tui (ETR:TUIGn) stock rose 2.2% after the holiday group said it expects to become profitable again in 2022, thanks to strong bookings as countries lift pandemic-related travel curbs.

ITV (LON:ITV) stock rose 0.8% after the broadcaster reported a “robust” first quarter, although it added advertising markets would get much tougher in the months ahead.

Additionally, Swedish Match (ST:SWMA) stock gained 9% after tobacco giant Philip Morris (NYSE:PM) confirmed it was making a recommended cash offer to buy the Swedish tobacco and nicotine products maker, valuing the Stockholm-listed company at approximately $16 billion.

The release of the U.S. consumer price index for April, at 8:30 AM ET (1230 GMT), will be the day’s main event. The index is expected to have fallen to 8.1% on the year from 8.5% the previous month.

Earlier Wednesday, China’s factory and consumer prices accelerated faster than expected in April, as COVID lockdowns disrupted supply chains. The consumer price index rose 2.1% year-on-year, while the producer price index rose 8% year-on-year.

German CPI also climbed 7.4% on the year in April, up from 7.3%, and a rise of 0.8% on the month, compared with a gain of 2.5% in March.

Oil prices bounced Wednesday, after slumping around 9% over the previous two sessions, with the market caught in a dynamic between the destruction of Chinese demand, given the country’s ongoing COVID lockdowns and the restriction of Russian supply.

The American Petroleum Institute reported U.S. crude stockpiles rose by 1.62 million barrels last week, and traders will be looking to see if government data, due later in the session, confirms this.

By 3:50 AM ET, U.S. crude futures traded 2.1% higher at $101.88 a barrel, while the Brent contract rose 2.2% to $104.70.

Additionally, gold futures rose 0.4% to $1,848.40/oz, while EUR/USD traded 0.3% higher at 1.0556.