European stocks eye weekly gains as defensives, tech shine

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 23, 2022. REUTERS/Staff

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  • STOXX 600 set to break 3-week losing streak
  • Tech stocks lead morning gains
  • Zalando plunges after profit warning

June 24 (Reuters) – European stocks rose on Friday, led by defensive and technology names, as investors pivoted to safer bets amid growing worries that tighter monetary policies and surging inflation will cause a global recession.

The pan-European STOXX 600 index (.STOXX) rose 1.1% after hitting a fresh 2022 low in the previous session when weaker-than-expected euro zone business activity data weighed on sentiment. read more

Still, the benchmark was on track to post small weekly gains, boosted by technology (.SX8P), personal & household goods (.SXQP) and healthcare (.SXDP) sectors.

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Trading has remained volatile in recent days as investors fear that rising interest rates and soaring inflation will sharply slow earnings and economic growth, sending commodity prices and government bond yields tumbling this week.

“Talks of a recession have gone up significantly and dented commodity prices and caused bonds to rally. That’s certainly helped equity markets,” said Roger Jones, head of equities at asset manager London & Capital.

“Cyclical stocks have started to selloff in-line with PMIs and defensive stocks have held up pretty well.”

The Ifo Institute’s survey showed German business morale fell more than expected in June, as rising energy prices and the threat of gas shortages unsettled businesses in Europe’s largest economy. read more

Earlier, data showed British consumers cut back on shopping in May in the face of fast-rising inflation, and a measure of their confidence sank to a record low this month. read more

Europe’s retail index (.SXRP) fell 1.3% to its lowest since March 2020 in the wake of German online fashion retailer Zalando’s (ZALG.DE) profit warning.

Zalando slumped 11.8% after it lowered its 2022 profit outlook, citing deteriorating macro conditions and consumer confidence.

Italy’s Saipem (SPMI.MI) dropped 10.4% after the energy services group said it would have financial resources available for less than one year if its plans to raise capital did not go through. read more

France’s Sanofi (SASY.PA) and UK’s GlaxoSmithKline (GSK.L) rose 1.9% and 1.7% after a late-stage data on an experimental COVID-19 vaccine from the drugmakers showed the shot confers protection against the Omicron variant of the vaccine. read more

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Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V

Our Standards: The Thomson Reuters Trust Principles.

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