European Stocks Close Sharply Higher As Progress In Peace Talks Lifts Sentiment

European stocks closed sharply higher on Tuesday, buoyed by reports that the face-to-face peace talks between Russia and Ukraine, currently going on in Istanbul, have yielded the most significant progress to date.

According to a Reuters report, Russia’s deputy defense minister has said that Russia has decided to drastically cut its military activity focused on Kyiv and Chernihiv. Ukrainian negotiators proposed adopting neutral status in exchange for security guarantees.

Slightly easing concerns about inflation following a drop in crude oil prices contributed as well to the positive mood in the markets.

The pan European Stoxx 600 climbed up 1.74%. The U.K.’s FTSE 100 advanced 0.86%, Germany’s DAX surged up 2.79% and France’s CAC 40 gained 3.08%, while Switzerland’s SMI gained 1.4%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Spain, Sweden and Turkey closed higher by 1 to 3.5%.

Portugal ended modestly higher, while Norway and Russia closed weak.

In the UK market, Melrose Industries, Ocado Group, IAG and Scottish Mortgage climbged 6 to 7.5%.

Coca-Cola HBC, JD Sports Fashion, Whitbread, Smith (DS), Prudential, Smurfit Kappa Group, ICP, Burberry Group, Croda International, Rolls-Royce Holdings, Aveva and Kingfisher gained 4 to 6%.

AstraZeneca gained 1.7% after the European Commission granted marketing authorization to Evusheld, a Covid-19 vaccine alternative.

Mulberry Group shares surged more than 5%. After a solid trading update for the second half, the luxury handbag maker said that full-year profit and revenue were set to be “moderately ahead” of expectations.

Glencore declined 3.8%. BAE Systems, Barclays, BP, Anglo American Plc, British American Tobacco, B&M European Retail and Shell ended lower by 1.9 to 2.5%.

In the German market, Continental soared more than 10%. HelloFresh ended nearly 10% up. Volkswagen, BMW, Merck, Covestro, HeidelbergCement, Daimler, Infineon Technologies, BASF, Siemens, Sartorius and Puma gained 3 to 6%.

In Paris, Faurecia zoomed nearly 17%. Valeo soared 15.2% and Renault rallied 12%. WorldLine, Societe Generale, BNP Paribas and Safran gained 6 to 10%.

Michelin, Credit Agricole, Hermes International, Airbus Group, Sodexo, LVMH, Accor, Air France-KLM, Saint Gobain and Unibail Rodamco ended stronger by 4 to 5.4%.

Thales ended lower by more than 5%. Sanofi declined 2.7% and ArcelorMittal drifted down 1.1%.

Sweden’s Alfa Laval gained nearly 4% after it won its largest order ever to supply brewery systems to Golden Brewery, the largest brewery in the United States.

Danish pharmaceutical company Novo Nordisk rallied 1.7%. The U.S. FDA has approved a higher dosage of the drugmaker’s 2 mg of Ozempic for the treatment of adults with type 2 diabetes.

In economic news, Germany’s consumer confidence is set to weaken more than expected in April, hurt significantly by the war in Ukraine, results of a closely-watched survey revealed Tuesday.

The forward-looking consumer confidence index dropped to -15.5 from a revised -8.5 in March, the market research growth GfK said. Economists had expected a reading of -14.

Separate data from Destatis showed that Germany’s import price inflation moderated slightly in February but remained at an elevated level.

Import prices grew 26.3% on a yearly basis in February, slower than the 26.9% increase in January. The rate was forecast to remain stable at 26.9%, which was the strongest since October 1974.

Survey results from the statistical office Insee showed France consumer confidence deteriorated more than expected in March, falling to 91 from 97 a month earlier. Economists had forecast the index to fall moderately to 94.

France’s general government deficit narrowed in 2021 buoyed by the economic rebound, another data released by the statistical office Insee showed.

The general government deficit came in at EUR 160.9 billion, accounting for 6.5% of gross domestic product, after 8.9% in 2020 and 3.1% in 2019. Revenue increased by 8.4% and expenditure was up 4%, the data showed.

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