FX.co ★ European markets mixed on Wednesday following period of gains

Major Western European stock indexes were mixed on Wednesday as investors awaited the resumption of Russian gas deliveries to the EU.

At the time of writing, the STOXX Europe 600 increased by 0.12% to 423.91 points.

The FTSE 100 gained 0.6%, reaching 7,323.7 in its best performance since June 20, the CAC 40 rose by 0.2% to 6,213.37, and the DAX shed 0.1%, falling to 13,305.1.

The UK index found support in rising stocks of oil and mining companies, such as Shell, British Petroleum, and Rio Tinto.

Biggest gainers and losers

The market cap of ASML Holding NV fell by 1.5%, despite the Dutch semiconductor equipment maker reporting higher profit and sales in the second quarter. The company trimmed its profit outlook for 2022 to 10% from an earlier forecast of 20%. Furthermore, ASML Holding NV warned that its income from shipments could fall in the future, and that its costs are expected to increase.

Shares of Royal Mail Plc slumped by 5%. Earlier, the British postal company reported that its sales decreased by 11.5% in Q1 2022 due to a decline in online shopping amid record-high inflation.

Furthermore, Royal Mail announced it could split the main postal business from its more profitable international logistics unit, GLS, if the performance of Royal Mail in the UK does not increase.

Shares of Uniper SE jumped by 7.9% in the afternoon on the news that the Nord Stream gas pipeline could resume operations after repairs.

The market cap of Akzo Nobel decreased by 1.7% due to lower than expected second-quarter earnings. New quarantine restrictions in China and falling demand for paint in Europe weighed down on the company's performance.

What's happening in the market?

Investors on Wednesday were focused on the potential resumption of Russian gas deliveries to Europe.

Earlier, Reuters reported that supply using the Nord Stream pipeline, which was halted on July 11-21, would be resumed on Thursday.

European markets found additional support in rising Asian and US equities. Main US indexes gained 2.5-3% on Tuesday. Asian markets advanced early on Wednesday as well.

US equities surged upwards amid falling Fed monetary tightening expectations.

European equities came under pressure from today's UK inflation data for June. According to the Office for National Statistics, inflation went up by 9.4% from 9.1% in May, the highest level since 1982. Economists expected inflation to rise to 9.3%.

ONS reported that rising food and energy prices drove inflation forward.

Record-high inflation has led to increased expectations of a major interest rate hike by the Bank of England in the near future among investors. Many analysts now see the regulator hike the bank rate by 50 basis points at its next meeting in early August.

Andrew Bailey, the governor of the Bank of England, earlier stated that returning inflation to its target level of 2% was the main priority of the UK central bank.

Investors await the results of the meeting of the European Central Bank, which will conclude on Thursday. The EU regulator is expected to increase the interest rate by 25 or 50 bps for the first time since 2011.During the previous policy meeting, ECB policymakers signalled the central bank would likely increase the rate by 25 basis points. However, investors and analysts are now uncertain – according to a recent report by Reuters, the European Central Bank is considering a 50 basis point hike amid record high inflation in the eurozone.

According to Eurostat, consumer prices in the eurozone countries rose by 8.6% in June year-over-year.

Tuesday's trading session

On Tuesday, European indexes advanced by 1-2% despite falling early on during the session.

The STOXX Europe 600 rose by 1.38% to 423,41 points.

The FTSE 100 gained 1.01% and reached 7,296.28, the CAC 40 rose by 1.79% to 6,201.22, and the DAX advanced by 2.69% to 13,308.41.

Shares of Electricite de France SA soared by 14.7% on Tuesday after the Ministry of Economy and Finance released more information about the planned nationalization of France's biggest electricity provider.

Novartis AG increased by 1.5%. On Tuesday, the company reported its second-quarter revenue dropped by 1.4%. However, Q2 revenue still exceeded market expectations.

The market capitalization Alstom declined by 2.6%. Due to record-high inflation, the order intake of French train manufacturer decreased in the first quarter of fiscal year 2022. However, the company's sales grew by 8%.

Shares of Volvo AB soared yesterday by 3.4%. The Swedish automaker reported higher revenue, as well as net and operating income in April and June.

SAS AB gained 3.7% on Tuesday. Earlier, the Scandinavian airline's management announced they have reached a deal with striking pilots, ending the two-week strike.

Shares of Polymetal International Plc jumped by 32.1% on the news that the company is considering selling its Russian assets.