On Thursday, the key stock indicators of Western Europe traded in the green zone against the background of the release of strong data on the business climate and GDP in Germany.
Thus, by the time of writing, the composite index of leading European companies STOXX Europe 600 increased by 0.7% - up to 435.07 points. Among the components of the STOXX Europe 600 index, the growth of shares was demonstrated by the Danish manufacturer of diagnostic equipment Ambu A/S (+8.5%), the Polish IT company Allegro.eu S.A. (+5.2%) and the Swedish oil and gas company Orron Energy AB (+4.9%).
Meanwhile, the French CAC 40 rose 0.58%, the German DAX registered an increase of 0.68% and the UK FTSE 100 gained 0.61%.
Rising and Falling Leaders
The share price of the Swiss pharmaceutical company Novartis AG rose by 0.7%. The day before, the company's management announced that it plans to spin off the Sandoz division and list its shares on the Swiss stock exchange in order to create a key European generics company.
The value of securities of the German energy company RWE AG rose by 0.3%. The company has agreed to acquire Polish solar developer Alpha Solar as part of a strategy to strengthen its renewable energy business in Central Europe.
The market capitalization of the British oil and gas company British Petroleum soared 2% against the backdrop of a sharp rise in global oil prices.
The share price of Norwegian fertilizer company Yara International rose 0.8% despite the chemical giant's announcement of a permanent decline in output amid high gas prices.
What's going on in the market right now?
All the attention of European investors on Thursday is directed to fresh statistics for the region.
Thus, according to the final estimate of the Federal Statistical Agency of Germany, in April-June, the gross domestic product of Germany grew by 1.8% in annual terms and by 0.1% in quarterly terms. At the same time, the market expected an increase in the economy by only 1.5% in annual terms.
Meanwhile, the indicator of the business climate in the country (the level of businessmen's confidence in the economy) in the outgoing month fell less than expected - to 88.5 points from a revised July figure of 88.7 points. The final figure is at its lowest level since June 2020, but it turned out to be better than the experts' forecast of 86.8 points.
On Thursday morning, France's National Statistical Office Insee reported that the country's business confidence index sank to 104 points in August from 106 points in July. Whereas experts assumed the indicator at the level of 105 points.
Strong statistics for the euroregion, despite the protracted energy crisis, raised investor sentiment ahead of the start of the annual symposium of the US Federal Reserve in Jackson Hole.
Last week, some of the participants in the US Federal Reserve meeting spoke in favor of slowing down the rate of increase in the base rate as part of the tightening of monetary policy. However, many others said that it is better to permanently maintain this indicator at a high level in order to reduce inflation to the target 2%.
According to the head of the US Federal Reserve, Jerome Powell, now the interest rate is at a neutral level. Despite this, many investors fear that the head of the US central bank will make a statement about a sharp tightening of monetary policy and destroy hopes for a rate cut next year.
It seems that the final solution to this dilemma will be announced to the market only this coming Friday as part of a speech by Powell, who will tell how far the US Central Bank can go in tightening its monetary policy.
By the way, according to the data of the American financial derivatives marketplace CME Group, 58.5% of analysts predict a key interest rate increase of 75 basis points in September.
Against this backdrop, global market participants are worried about the prospects for the global economy in the context of record inflation and permanent rate hikes by world central banks.
Since the beginning of this week, traders have been avoiding decisive steps and in every possible way refraining from risky assets, which include European stocks. Market experts are also increasingly saying that there will be few reasons for market optimism in the near future.
Trading results the day before
Last Wednesday, European stock indicators showed growth as part of a correction after a long fall the day before.
Thus, the composite indicator of leading companies in Europe STOXX Europe 600 increased by 0.16% - to 432.05 points.
Meanwhile, the French CAC 40 stock market index gained 0.39%, the German DAX index rose 0.2% and only the British FTSE 100 index sank 0.22%.
The stock price of the Israeli developer of laboratory diagnostic equipment BATM Advanced Communications Ltd. fell on Wednesday by 6.7%. In the first half of fiscal year 2022, the company cut its pre-tax profit amid a decline in revenue in the biomedical division.
The share price of UK-based software developer Aveva soared by 27% on the eve. On Wednesday, it became known that French industrial giant Schneider Electric SE plans to buy out the shares of the company, in which it already owns about 60%.
The market capitalization of British low-cost airline easyJet PLC slipped 0.3% amid news of the appointment of three new non-executive directors, who will take office on 1 September.
Shares of Norwegian telecommunications company Telenor ASA lost 1%. The day before, the company's management announced changes in the management structure of a number of divisions and the creation of new divisions for infrastructure and related services.
Shares of British engineering company Clean Power Hydrogen PLC fell 2.1% amid weaker-than-market 2022 revenue guidance.
The share price of British car dealership chain Lookers PLC rose by 2.7%. The day before, the company's management reported strong results for the first half of 2022, despite the continued weakness of the UK automotive market.