European stocks rallied on Friday after two Fed officials signaled support for a second straight 75-basis-point rate hike at the U.S. central bank’s policy meeting later this month, alleviating some fears of a 100-basis point hike.
Italy’s political turmoil remained in focus after President Sergio Mattarella rejected Prime Minister Mario Draghi’s resignation and asked him to address parliament next week to get a clearer picture of the political situation.
Draghi resigned after coalition party 5-Star Movement failed to back him in a confidence vote over his plan to combat soaring prices.
Also, the European Central Bank is due to meet next week amid Italy’s political turmoil. The central bank is expected to raise interest rates by 25 bps, well short of the 75-bps that the Fed could now hike in July.
The pan European Stoxx 600 jumped 1.1 percent to 411.01 after losing 1.5 percent in the previous session.
The German DAX climbed 1.9 percent, while France’s CAC 40 index and the U.K.’s FTSE 100 both added around 0.9 percent.
Swiss luxury goods group Richemont tumbled 4.3 percent after the company saw sales in mainland China plunge 37 percent in the three months through June amid lockdowns, stringent testing requirements and a near collapse in international tourist travel.
TomTom NV soared 12 percent after the Dutch navigation and digital mapping company confirmed its revenue and cashflow guidance for 2022 and 2023 despite strained supply chains.
Automakers BMW, Volkswagen and Renault surged 3-5 percent despite European passenger car registrations declining for the twelfth successive month in June.
Registrations of new passenger cars decreased 15.4 percent year-over-year in June, faster than the 11.2 percent fall in May, as supply chain issues continue to hurt production, the European Automobile Manufacturers’ Association said.
Defensive stocks were in demand in London, with British American Tobacco climbing more than 3 percent amid recession fears.
Oil & gas firm BP Plc rose 2.8 percent and Shell added 2.5 percent despite sluggish growth data from China.
Luxury brand Burberry slumped 6.4 percent after it reported sales growth of just 1 percent in its latest financial quarter.
Miner Rio Tinto lost 2.6 percent after it warned of considerable headwinds impacting its underlying earnings in the second half.
Market Analysis
European Shares Rebound As Rate Hike Fears Ebb
2022-07-15 09:44:42
