At the auction on Tuesday, the key stock indicators of Western Europe show an increase after a loud decline the day before.
Thus, by the time of writing, the aggregate indicator of the leading companies in Europe, the STOXX Europe 600, increased by 0.05% to 412.74 points.
The highest results among the components of the STOXX Europe 600 are shown by the securities of the Finnish energy concern Fortum Oyj (+8.2%) and the German generating company Uniper SE (+4%).
The list of declines here is headed by shares of the French IT company Atos SE (-20%), World line SA, working in the field of electronic payments (-8.1%) and the Scandinavian developer Fabege (-5.3%).
Meanwhile, the British stock index FTSE 100 rose 0.3%, the French CAC 40 rose 0.5%, and the German DAX gained 0.8%.
At the same time, the quotes of leading European banks are showing permanent growth on Tuesday, since an increase in the key rate raises their interest income. As a result, Societe Generale securities soared by 1.5%, and BNP Paribas shares rose by 1.1%.
The market capitalization of the French insurer SCOR and tire manufacturer Michelin collapsed by 0.6% and 1.6%, respectively, amid the deterioration of analysts' recommendations for their securities.
Current state of the market
European investors are focused on the results of the US Federal Reserve's June meeting, the publication of which is scheduled for Wednesday evening.
According to the final data of the German Federal Statistical Office, released Tuesday morning, the level of consumer prices in the country rose to 7.9% in May from April's 7.4% in annual terms. The obtained indicator turned out to be a record in the history of its calculations by the Federal Statistical Bureau of the country and coincided with the preliminary data.
Meanwhile, in the past month, prices for wholesale goods in Germany increased by 22.9% after a record April rise of 23.8%.
As for the internal statistics for the UK, according to the Office of National Statistics of the country, the economy of England significantly declined in April. Thus, the gross domestic product (GDP) of the state sank by 0.3% amid a simultaneous decline in production, services and construction for the first time since January last year.
In addition, the unemployment rate in the UK increased in May, despite a permanent increase in the overall employment rate.
Thus, the number of applicants for unemployment benefits decreased by 19,700, and the unemployment rate rose to 3.8%.
The decline in the UK economy occurred ahead of the Bank of England meeting scheduled for next Thursday. It is expected that following the meeting, the British central bank will increase the key rate by 0.25% for the fifth time in a row since December 2021, after the inflation rate in the state soared to a four-year high in April and amounted to 9%.
Trading results on the eve
As for the results of the previous trading session, European stock exchange indicators showed a steady decline on Monday and lost about 3% amid news of a record acceleration of inflation in the United States.As a result, the aggregate indicator of the leading companies in Europe STOXX Europe 600 decreased by 2.41% to 412.52 points.
The highest results among the components of the STOXX Europe 600 were shown by the securities of the German chemical company Brenntag SE (+3.2%), the Swiss pharmaceutical company Vifor Pharma AG (+2.8%) and the French company Thales S.A. (+2.1%), which produces avionics.
The list of declines here was headed by the shares of the Dutch operator of the food delivery service Just Eat Takeaway.com N.V. (-16.2%), the Italian oilfield services company Saipem S.p.A (-15%) and the German TAG Immobilien AG (-12.5%), working in the real estate sector.
The British stock index FTSE 100 lost 1.5%, the French CAC 40 – 2.7%, and the German DAX - 2.4%.Experts consider a decrease in investors' appetite for risky assets to be a key factor of pressure on the European stock market on Monday against the background of inflation data released on Friday in the United States.
Thus, according to the US Federal Bureau of Labor Statistics, in May the inflation rate in the country rose to 8.6% in annual terms, which was the worst indicator for the past 40 years, since the winter of 1981. By the way, earlier market analysts predicted the continuation of consumer price growth at the April level of 8.3%.
Against the background of data on the record level of inflation in the United States, stock market participants are afraid of further aggressive steps and tighter monetary policy of the Fed, because decisive actions of the central bank can have a negative impact on the global economy.
