Categories
Markets

European stocks climb as global markets look for rebound; Stoxx 600 up 1%

LONDON — European stocks advanced on Friday as global markets looked to regain some ground after a bruising week, with investors assessing the outlook for inflation and interest rates.

The pan-European Stoxx 600 added 1% in early trade, with banks climbing 1.9% to lead gains as all sectors and major bourses entered positive territory.

European markets fell on Thursday as investors remained concerned about slowing growth, interest rate hikes and red-hot April inflation data from the United States, which sparked concerns that a path of aggressive interest rate hiking lies ahead.

US Federal Reserve Chairman Jerome Powell said Thursday that he could not guarantee a so-called “soft landing” that tempers inflation without pushing the economy into recession.

Global stocks have endured a rollercoaster week but look set to regain some ground on Friday. Shares in Asia-Pacific advanced by mid-afternoon with Japan’s Nikkei 225 leading the way on a 2.6% climb.

Meanwhile, US stock futures were higher in early premarket trade as investors hope the S&P 500 can avoid sliding into bear market territory, with the index closing down more than 18% from its all-time high on Thursday, just 2% shy of an official bear market.

The tech-heavy Nasdaq is already in a bear market, closing Thursday down more than 29% from its all-time high, while the Dow Jones Industrial Average has failed for six consecutive trading sessions.

The Stoxx 600 in Europe began Friday’s session down 13% since the beginning of the year.

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Investors are also monitoring the geopolitical fallout from the war in Ukraine. Russia on Thursday threatened retaliation against Finland after Finnish leaders said the northern European nation must apply to join NATO “without delay.”

European leaders are also facing a race to secure alternative gas suppliers after Moscow announced sanctions on European subsidiaries of its majority state-owned corporation Gazprom. The move came after Ukraine’s state-owned grid operator suspended Russian flows into Europe through a key entry point.

On the data front, French inflation was confirmed at an annual 5.4% in April.

Euro area industrial production readings for March are due on Friday morning.

In terms of individual share price movement, British investment company Bridgepoint Group jumped more than 10% following its annual general meeting, while Finnish state-owned energy company Fortum climbed 9.9% in early trade.

Shares of Belgian pharmaceutical company UCB fell 13% after the US Food and Drug Administration said it cannot approve a key psoriasis drug.

Swedish industrial company Atlas Copco dropped 75% due to recalculation after a share split which came into effect on Friday, whereby one share was replaced by four new ordinary shares and one redemption share.

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Categories
Sports

Tottenham vs Arsenal: Gunners must keep Kulusevski, Son and Kane quiet and Saka can hurt Spurs

It all comes down to this. It’s a do or die North London Derby with Champions League football on the line. The stakes have rarely been higher between these two and it promises to be a electric atmosphere in North London. 

Tottenham and Arsenal have been scrapping for a top four spot all season long and the tensions between the two have mounted after the Gunners postponed this clash earlier on in the season over Covid cases – despite having just one positive test – in a move that infuriated Spurs boss Antonio Conte.

The timing of this rescheduled game could hardly come at a better time, towards the business end of the season with just three games to go. Four points separate the pair and Arsenal can clinch Champions League football with victory over Spurs tonight.

Even if Spurs win – they will need Arsenal to slip up in their final two games against Newcastle and Everton. Tottenham simply have to go for it, but will that play into Arsenal’s hands, or could the enormity of the occasion play into their thinking?

Conte admitted securing a top four finish would be like ‘winning a title’, and the Italian would have studied Arsenal’s side looking for weaknesses, though Spurs have shown inconsistencies this season and will have flaws of their own that the Gunners can exploit. 

Sportsmail gives a tactical breakdown of this epic North London showdown, detailing where the game could be won and lost.

Tottenham and Arsenal go head-to-head on Thursday night battling it out for a top four spot

Arsenal are in the driver's seat - four points clear of their bitter rivals

Tottenham and Arsenal go head-to-head on Thursday night battling it out for a top four spot 

ARSENAL MUST SHUT DOWN TOTTENHAM’S TERRIFIC TRIO

Without a doubt going into this one, the biggest talking point has been the threat posed by Tottenham’s front three of Dejan Kulusevski, Harry Kane and Heung-min Son, who have forged a dangerous forward line.

They have 57 goals between them and 23 assists and each have shone in their own right this season – with Kulusevski joining in Janaury from Juventus and sparking down the right flank for Tottenham.

Arsenal’s defenders will have their hands full up against the trio, who have all played their part and been instrumental in helping Spurs pick up results in the last five games and can be lethal on the counter attack, which will likely be Conte’s main stategy in this game.

However, they have shown that an organised and rigid defence can keep them quiet in recent times. 

Tottenham drew a blank in back to back games against Brighton and Brentford, who both restricted the supply to the front line – with both games resulting in zero shots on target from Conte’s men. 

Arsenal will have to monitor the threat of Dejan Kulusevski, Son Heung-min and Harry Kane

Kane and Son have the best goal combinations in Premier League history and have the ability to change the game at any point

Arsenal will have to monitor the threat of Dejan Kulusevski, Son Heung-min and Harry Kane

There is a feeling that Spurs are reliant on their three star players to make things happen, and when the team have a slow start to the game there can be frustration.

Arsenal will have to be switched on throughout the 90 minutes and will want to pay particular attention to Kane – who has been dropping deep and turning provider in recent months. The England captain can act as a playmaker to pick out perfect defence-splitting passes, but is also obviously a huge goalscoring threat and it will require a team effort to mark him out of the game. 

Ben White and Gabriel Magalhaes may have to double team him at times when he arrives in the box but Arsenal’s midfielders will also be forced to do a job on him when he drops into those pockets in midfield.

Ben White and Gabriel Magalhaes have a marking job to do on Harry Kane - but face a dilemma when he drops into midfield

Ben White and Gabriel Magalhaes have a marking job to do on Harry Kane – but face a dilemma when he drops into midfield 

We’ve seen Kane cut a marginal figure at various points this season and quite often if Spurs have a bad day, he struggles to get going. Son has proven he can make the difference – as he did by netting in the 1-1 draw against Liverpool – and either Takehiro Tomiyasu or Cedric Soares will be wary of the threat he poses.

Kulusevski has often been the supply man for both Kane and Son this season. He’s racked up eight assists and he only made his debut in February. We’ve seen him drive into the box and then twist and turn his man with brilliant footwork to provide chance on a plate. 

He’s scored three times too – and Arsenal will have to come up with a solid man-marking job to ensure not too much attention is paid to each of the three players, otherwise it could expose their team elsewhere. 

SAKA CAN EXPOSE TOTTENHAM’S WEAK LEFT SIDE 

Arteta will be fretting over the fitness of Bukayo Saka for this game after he limped off 20 minutes from time in their 2-1 win over Leeds United – and that’s because he is a game changer on his day who can really hurt Tottenham’s back line. 

Saka has gone from strength to strength this season with 11 goals and six assists, winning plaudits with his direct style of play – and he could be a real menace for Ryan Sessegnon and Ben Davies on Tottenham’s left hand side if he is match fit.

The England star stood out for the Three Lions at Euro 2020 this summer and deserves credit for bouncing back from a disappointing penalty shootout miss against Italy in the final.

Bukayo Saka's directness and dribbling ability could cause real issues for Spurs down the left

Bukayo Saka’s directness and dribbling ability could cause real issues for Spurs down the left 

He’s been sensation for Arsenal this season and is in form too – with two goals and one assist in his last four games. 

Saka has created 64 chances for Arsenal – according to Opa – level with Son Heung-min. He’s carved out an opening every 42.7 minutes, better than Kane, Son or Kulusevski. His trickery, speed and clever footwork is also highlighted in the amount of fouls he wins – 56 – including 20 in the final third. Kane is Tottenham’s most fouled player on 47.

Spurs have to be careful if Saka burst through with the ball – he can be so dangerous and is always willing to break into the box with the ball, having 210 touches in the opposition penalty area this season. 

Being without him for this crucial game would be a body blow for Arteta, who knows Saka’s running and dribbling ability can bamboozle Tottenham defenders and create openings for Arsenal’s forward players. 

MIDFIELD BATTLE COULD DECIDE THE GAME 

Tottenham’s midfield largely picks itself these days with Oliver Skipp out injured and Harry Winks not a first team regular, which means Conte is likely to go with Pierre-Emile Hojbjerg and Rodrigo Bentancur as his middle two. 

The pair have been solid since the Uruguayan midfielder arrived from Juventus in the January transfer window and offer a decent balance in the centre of the park as a tough tackling presence and a deep-lying playmaker who has great vision and can pick out a pass to set the team on their way.

Bentancur has given Spurs a real lift since he joined and has added a dash of creativity with a superb range of passing and he’s actually boosted the displays of Hojbjerg, who has had a few fans on the fence about his ability   

Whoever's midfield comes out on top can give their side the edge and change their fortunes

Whoever’s midfield comes out on top can give their side the edge and change their fortunes

Rodrigo Bentancur has given Tottenham's midfield a lift and helps them build attacking plays

Rodrigo Bentancur has given Tottenham’s midfield a lift and helps them build attacking plays

Given Spurs are likely to play a 3-4-3 against Arsenal, Arteta will look to flood the midfield with his 4-2-3-1 system, and dominate possession, which should suit Spurs as that will allow them to sit deep and hit them on the counter. 

But when Tottenham do have the ball they’ll need to play intelligently and move the ball quickly as Conte likes to build up play from defence to work the ball towards his attacking players. 

Arsenal should go with Mohamed Elneny and Granit Xhaka as their two holding players with Thomas Partey unavailable due to injury. The defensive-minded pair can help frustrate Tottenham with their physicality and interceptions – but the surprise form of Elneny in recent games could catch Tottenham off guard.

The Egyptian is not usually a first choice name at Arsenal – he has only made five starts in the league this season – but four of them have come in the last four games, and he has impressed in all those matches. His passing is also a factor that stands out, completing 97.5 per cent of his passes in the win over Leeds, which should keep the Gunners ticking and help them keep the ball. 

Granit Xhaka and Mohamed Elneny have formed a solid partnership that has helped steer Arsenal towards Champions League football

Granit Xhaka and Mohamed Elneny have formed a solid partnership that has helped steer Arsenal towards Champions League football

Martin Odegaard scored against Spurs in the reverse fixture and will be a huge threat with his ability to play in tight spaces and create space

Martin Odegaard scored against Spurs in the reverse fixture and will be a huge threat with his ability to play in tight spaces and create space

Overall this season Elneny has a 92 per cent pass success rate and is making 1.9 tackles per 90 minutes – higher than Tottenham’s best from Hojbjerg on 1.4.

Meanwhile, Odegaard scored in the reverse fixture at the Emirates and will always be seen as a threat if he can pick up the ball in tight areas and create space for himself. 

The Norwegian has created 67 chances this season and has a dribbling success rate of 52.4 – the best of any player from either side.

Whoever’s midfield gets on top in the game can have a decisive impact on the result and could change their team’s fortunes on the night. 

CONTE’S ARSENAL HOODOO

Tottenham fans have been excited to see Antonio Conte manage Spurs in big games like this and his tactical experience has already seen Spurs beat City and get two points off feared title challengers Liverpool.

But they should look away now because the Italian has a woeful record against Arsenal – he’s only ever won once against them. 

He’s managed a total of eight games against them, drawing three and losing four, with an aggregate score of 15-8. 

Chelsea fans will remember the 3-0 loss to the Gunners in 2016 that prompted a furious reaction from Conte, who ended up switching his Blues side to a back three and that was catalyst to them winning the title in the 2016-17 campaign. 

Antonio Conte has a woeful record against Arsenal - winning just once in his eight meetings

Antonio Conte has a woeful record against Arsenal – winning just once in his eight meetings

He got his revenge in the reverse fixture that season – winning 3-1 at Stamford Bridge in February to move closer to winning the Premier League, but then his side were ousted 2-1 by Arsene Wenger’s men in the FA Cup final that summer. 

Their next two meetings in 2017-18 were draws before they were dumped out of the League Cup semi-finals.

Conte will be well aware that if there are any fixtures you must win as a Tottenham boss – Arsenal home and away are it. For whatever reason he has not been able to have too much success against the Gunners, but has a fresh slate in his first match against them as Spurs boss. 

He has a new team and has never faced Mikel Arteta before. Tottenham were dreadful in the reverse fixture, losing 3-1, so he has a chance to show just how far his team have come since that dismal day. 

He is up against Mikel Arteta for the first time and has a chance to show how far his Spurs side have come since losing 3-1 to Arsenal in September

He is up against Mikel Arteta for the first time and has a chance to show how far his Spurs side have come since losing 3-1 to Arsenal in September

WHO’S GOT THE NERVES? 

Spurs have already been building up the atmosphere towards tonight’s game, messaging supporters urging them to make a huge noise and informing them they will have blue and white flags to hold up to make it as special an evening as possible.

This is the first ever North London Derby to be played in front of fans since the Tottenham Hotspur Stadium opened in 2019 and the home faithful will be doing everything they can to Spurs the team on. 

There is already so much on the line as it is, but with the added hostile atmosphere from the crowd, players might be feeling the nerves a little. 

But it’s difficult to determine which way that will swing until kick off comes around. Spurs will appreciate the loud roaring support and it will give them an initial lift for sure, but many teams relish playing in a rival’s backyard and will get their own motivation from that too.

Tottenham and Arsenal stars will be playing in an intense atmosphere on Thursday night in the first ever derby in front of fans at the Tottenham Hotspur Stadium

Tottenham and Arsenal stars will be playing in an intense atmosphere on Thursday night in the first ever derby in front of fans at the Tottenham Hotspur Stadium 

The home atmosphere will give Spurs a lift but they must ensure they use the energy to their advantage and not fall flat under the expectation

The home atmosphere will give Spurs a lift but they must ensure they use the energy to their advantage and not fall flat under the expectation 

It’s Spurs who must chase the game, with Arsenal knowing as long as they avoid defeat they stand a good chance of getting top four – with victory clinching it. 

If it was the other way round then an intimidating atmosphere might work in their favour, but seeing as they’ll have to put in a cautious performance to keep their four point gap, the enviroment might cause a few mistakes. 

And from Tottenham’s perspective there is always the prospect of slipping up under the weight of expectation, which fans have seen countless times throughout the years.

The atmosphere will make for a fantastic spectacle and could even make tactics go out of the window as both teams fight for the win.  

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Categories
Business

UK economy ‘only going to get worse’ as growth slowdown begins

The UK economy shrank by 0.1% in March and the situation is expected to worsen as the country’s cost-of-living crisis escalates.

Tim Ireland | Xinhua News Agency | Getty Images

LONDON — A growth slowdown is underway in the UK after the economy shrank by 0.1% in March, with economists expecting further contractions this year.

Although the economy grew 0.8% for the first quarter as a whole, slightly below consensus forecasts for 1% growth, January was the only positive month of the quarter. The war in Ukraine and subsequent supply chain problems and energy price spikes have compounded the toll of inflation, which is running at a multi-decade high.

Sterling hit a two-year low versus the US dollar following the data as traders digested growing uncertainty about the UK’s economic outlook.

The surprise monthly contraction in March — economists had expected the figure to come in flat — presents a worry for Prime Minister Boris Johnson’s government as the country’s cost-of-living crisis is yet to reach its peak.

“Ultimately, things are only going to get worse for consumers. Energy bills are expected to soar again later this year when the price cap is reassessed, while inflation is proving stickier than expected,” said Hinesh Patel, portfolio manager at Quilter Investors.

UK inflation hit a 30-year high of 7% in March and in April, the country’s energy regulator increased its price cap by 54% to accommodate soaring prices. In the Queen’s Speech to mark the state opening of parliament on Wednesday, the government promised to focus on economic growth in order to address the spiraling cost of living.

Patel added that the Bank of England now faces a “near impossible task of managing the economy out of this quagmire.”

“They are in aggressive rate raising mode for now, but this cannot remain the case for long given the economic issues already starting to play out,” he added.

The Bank of England has hiked interest rates at four consecutive policy meetings as it looks to rein in inflation, and markets are pricing in another five hikes by spring of 2023.

However, James Smith, developed markets economist at ING, suggested that the central bank’s more cautious tone in recent weeks indicates that it will not meet these expectations, and may settle for a couple more hikes before hitting pause so as not to exert further downward pressure on economic growth.

Thursday’s GDP figures also showed that the UK’s dominant consumer-facing services industry took a substantial hit in March, falling 1.8% as consumer spending declined amid the squeeze on households.

Health spending to fall away

ING’s Smith said a second consecutive decline in output should be expected in April, coinciding with the end of free Covid-19 testing.

“Surprisingly, health output actually increased in March despite the ongoing wind-down of Covid-related activities, but clearly, that’s unlikely to last,” Smith noted.

“Health spending has been a key driver of GDP through the pandemic, and in fact, the overall size of the economy would be around 1% smaller had output in this sector stayed flat since early-2020.”

Caroline Simmons, UK chief investment officer at UBS Global Wealth Management, was also cautious looking ahead.

“There is growing potential for UK GDP to be negative in the second quarter, which is in part due to the consumer squeeze from energy price rises,” she said.

UK stocks insulated

As concerns about the growth outlook in the coming quarters grow, investors are also considering the impact it could have on markets.

However, Simmons noted that the UK economy is not representative of the UK equity market. UBS sees upside to the FTSE 100 index with a December target of 8,100; the FTSE was trading around 7172 mid-morning Thursday.

Importantly for the UK, both labor demand and business investment intentions remain firm, reducing the risk of a sharp downturn in overall growth, according to Daniel Casali, chief investment strategist at Tilney Smith & Williamson.

The Bank of England expects growth to be flat in the second quarter, though Casali also noted that there is potential for a modest contraction.

“For investors, given that the large cap UK-listed companies derive the bulk of their sales abroad, it really is global growth that matters,” Casali added.

The IMF recently reduced its global growth forecast to 3.6% for 2022 and 2023, from 6.1% last year.

“Along with the sharp EPS gains made by the energy sector, the outlook for UK company profits has improved. The consensus forecasts 15% Earnings Per Share growth for 2022, a big pick-up from just under 3% at the start of the year ,” Casali added.

“At the very least, rising company earnings (and cheap valuations) should limit UK equity downside in current volatile market conditions.”

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Categories
Markets

Investors digest US inflation data for April

LONDON — European stocks are expected to fall sharply at the open as global markets digest the latest inflation reading out of the United States. The reading has sparked concerns that a path of aggressive rate hiking lies ahead.

The UK’s FTSE index is seen opening 88 points lower at 7,251, Germany’s DAX 216 points lower at 13,596, France’s CAC 40 down 107 points at 6,150 and Italy’s FTSE MIB down 488 points at 22,953, according to data from IG.

Global investors are digesting the April inflation reading from the US, which showed the consumer price index surged 8.3% in April as compared with a year ago. The inflation rate was higher than expected and still running close to a 40-year high of 8.5%.

Analysts are mixed on whether the data suggests inflation has hit a peak.

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The April reading, which represented a slight ease from March’s peak, was also above the Dow Jones estimate for an 8.1% gain. Shares on Wall Street dropped following the data and markets in Asia-Pacific declined in Thursday morning trade following the losses stateside.

US stock futures were slightly higher Wednesday evening as investors look ahead the latest US data on jobless claims and the producer price index, which measures prices at the wholesale level.

In Europe, earnings come from Veolia, Bouygues, Aegon, Allianz, Commerzbank, RWE, Siemens and Zurich Insurance. UK preliminary GDP figures for the first quarter are also due.

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Categories
Markets

Investors digest US inflation data for April

LONDON — European stocks are expected to fall sharply at the open as global markets digest the latest inflation reading out of the United States. The reading has sparked concerns that a path of aggressive rate hiking lies ahead.

The UK’s FTSE index is seen opening 88 points lower at 7,251, Germany’s DAX 216 points lower at 13,596, France’s CAC 40 down 107 points at 6,150 and Italy’s FTSE MIB down 488 points at 22,953, according to data from IG.

Global investors are digesting the April inflation reading from the US, which showed the consumer price index surged 8.3% in April as compared with a year ago. The inflation rate was higher than expected and still running close to a 40-year high of 8.5%.

Analysts are mixed on whether the data suggests inflation has hit a peak.

Stock picks and investing trends from CNBC Pro:

The April reading, which represented a slight ease from March’s peak, was also above the Dow Jones estimate for an 8.1% gain. Shares on Wall Street dropped following the data and markets in Asia-Pacific declined in Thursday morning trade following the losses stateside.

US stock futures were slightly higher Wednesday evening as investors look ahead the latest US data on jobless claims and the producer price index, which measures prices at the wholesale level.

In Europe, earnings come from Veolia, Bouygues, Aegon, Allianz, Commerzbank, RWE, Siemens and Zurich Insurance. UK preliminary GDP figures for the first quarter are also due.

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Categories
Business

investors look ahead to US inflation data for April

LONDON — European stocks advanced on Wednesday morning as investors looked ahead to the latest inflation reading.

The pan-European Stoxx 600 added 1.2% by mid-morning. Autos jumped 2.9% to lead gains as all sectors traded in positive territory except health care, which fell 0.9%.

The positive morning in Europe came after choppy trading sessions in the region, and in markets further afield.

European stocks climbed on Tuesday as global markets rebounded from a broad sell-off in recent days, prompted mainly by concerns about inflation and rising interest rates — and the potential for a global recession.

On Tuesday, US stocks seesawed as the major averages struggled to recover from three days of heavy selling that brought the S&P 500 to its lowest level in more than a year.

Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen.

salman ahmed

Global Head of Macro and Strategic Asset Allocation, Fidelity International

Investors are looking ahead to US inflation data for April on Wednesday which is expected to come in slightly below March’s 8.5% and could signal that inflation has reached a peak.

Recent market volatility has been driven by investor concerns over rising interest rates and question marks over how aggressively the Federal Reserve will act to curb rising inflation. In addition, investors continue to monitor the ongoing conflict in Ukraine and lockdowns in China.

European natural gas prices jumped on Wednesday after Ukraine’s state-owned grid operator suspended Russian gas flows through a key entry point.

Gas TSO of Ukraine on Tuesday announced force majeure on its Sokhranivka gas metering station and Novopskov border compressor station, both of which are situated in Russian-occupied territory in eastern Ukraine and account for almost a third of gas flows from Russia to Europe.

Stock picks and investing trends from CNBC Pro:

Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC on Wednesday that his team were underweight on stocks across the board, but favored the US over Europe.

“Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen,” he added.

Overnight, shares in Asia-Pacific were mixed as investors watched for market reaction to the release of higher-than-expected Chinese inflation data for April. Meanwhile, US stock futures were higher in early morning trading Wednesday ahead of the forthcoming US inflation data.

In Europe, German inflation in April rose to an annual 7.4%, its highest print since 1981.

Earnings from a wide range of companies were released before the bell, including Alstom, Commerzbank, Continental, E.On, Siemens Energy, Thyssenkrupp and Tui.

British catering company Compass Group jumped 9.6% after an upbeat earnings report, while German engineering and steel conglomerate Thyssenkrupp also added more than 10% after beating expectations.

Swedish Match shares climbed 8.7%, building on Tuesday’s surge after the tobacco company agreed to a $16 billion sale to US giant Philip Morris International.

British home emergency repairs firm HomeServe bounced more than 11% after Bloomberg reported that Canada’s Brookfield Asset Management was nearing a takeover of the company.

At the bottom of the Stoxx 600, German biotech firm Evotec plunged more than 14% after its first-quarter results.

Shares of German drugmaker Bayer fell 6.5% after US President Joe Biden’s administration asked the US Supreme Court not to consider the company’s appeal to dismiss claims from customers alleging that its Roundup weedkiller causes cancer.

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Categories
Business

investors look ahead to US inflation data for April

LONDON — European stocks advanced on Wednesday morning as investors looked ahead to the latest inflation reading.

The pan-European Stoxx 600 added 1.2% by mid-morning. Autos jumped 2.9% to lead gains as all sectors traded in positive territory except health care, which fell 0.9%.

The positive morning in Europe came after choppy trading sessions in the region, and in markets further afield.

European stocks climbed on Tuesday as global markets rebounded from a broad sell-off in recent days, prompted mainly by concerns about inflation and rising interest rates — and the potential for a global recession.

On Tuesday, US stocks seesawed as the major averages struggled to recover from three days of heavy selling that brought the S&P 500 to its lowest level in more than a year.

Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen.

salman ahmed

Global Head of Macro and Strategic Asset Allocation, Fidelity International

Investors are looking ahead to US inflation data for April on Wednesday which is expected to come in slightly below March’s 8.5% and could signal that inflation has reached a peak.

Recent market volatility has been driven by investor concerns over rising interest rates and question marks over how aggressively the Federal Reserve will act to curb rising inflation. In addition, investors continue to monitor the ongoing conflict in Ukraine and lockdowns in China.

European natural gas prices jumped on Wednesday after Ukraine’s state-owned grid operator suspended Russian gas flows through a key entry point.

Gas TSO of Ukraine on Tuesday announced force majeure on its Sokhranivka gas metering station and Novopskov border compressor station, both of which are situated in Russian-occupied territory in eastern Ukraine and account for almost a third of gas flows from Russia to Europe.

Stock picks and investing trends from CNBC Pro:

Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC on Wednesday that his team were underweight on stocks across the board, but favored the US over Europe.

“Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen,” he added.

Overnight, shares in Asia-Pacific were mixed as investors watched for market reaction to the release of higher-than-expected Chinese inflation data for April. Meanwhile, US stock futures were higher in early morning trading Wednesday ahead of the forthcoming US inflation data.

In Europe, German inflation in April rose to an annual 7.4%, its highest print since 1981.

Earnings from a wide range of companies were released before the bell, including Alstom, Commerzbank, Continental, E.On, Siemens Energy, Thyssenkrupp and Tui.

British catering company Compass Group jumped 9.6% after an upbeat earnings report, while German engineering and steel conglomerate Thyssenkrupp also added more than 10% after beating expectations.

Swedish Match shares climbed 8.7%, building on Tuesday’s surge after the tobacco company agreed to a $16 billion sale to US giant Philip Morris International.

British home emergency repairs firm HomeServe bounced more than 11% after Bloomberg reported that Canada’s Brookfield Asset Management was nearing a takeover of the company.

At the bottom of the Stoxx 600, German biotech firm Evotec plunged more than 14% after its first-quarter results.

Shares of German drugmaker Bayer fell 6.5% after US President Joe Biden’s administration asked the US Supreme Court not to consider the company’s appeal to dismiss claims from customers alleging that its Roundup weedkiller causes cancer.

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