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Europe close: Stocks start week on front foot but analysts cautious

By Alexander Bueso

Date: Monday 20 Jun 2022

Europe close: Stocks start week on front foot but analysts cautious

(Sharecast News) - European stocks put in slight gains at the start of the week with investors eyeing the latest election results in France and Spain.
Against that backdrop, IG chief market analyst, Chris Beauchamp, saw scope for a so-called 'bear market rally' over the coming week but not much more on the back of Friday's options expiry in the US and an absence of big central bank decisions.

The pan-European STOXX 600 index was up 0.96% to 407.14 after the large losses incurred during the previous week.

France's Cac-40 meanwhile advanced 0.64% to 5,920.09 while the Ibex 35 added 1.72% to 8,286.0.

US markets were closed on Monday for a public holiday.

Nevertheless, Hargreaves Lansdown analyst, Susannah Streeter, was of a more cautious bent, telling clients: "Investors sense there is trouble ahead for the world economy, given that the priority of the powerful US Federal Reserve is to stamp out the flames of inflation even if that means extinguishing growth."

Elections on Sunday saw French President Emmanuel Macron lose control of the country's parliament while Spain's centre-right PP party clinched an absolute majority in the country's largest province, Andalusia.

In economic news, European Central Bank governing council member, Martins Kazaks, left the door open to action in between ECB meetings should it be required to forestall so-called fragmentation risks.

On the downside, housebuilders slumped after the latest survey from Rightmove indicated that house prices were likely to start falling in the next five months. Barratt, Berkeley, Persimmon and Taylor Wimpey were all weaker.

French carmaker Renault topped the Stoxx after Jefferies upgraded the stock to "buy".

Shares in building materials company Kingspan slumped after the company said the mood in most of its end markets had deteriorated over the last two months, with order intake volume "significantly" lower year-on-year.

Budget airline easyJet edged higher even after announcing more flight cuts as the UK's travel chaos showed no signs of abating.

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