Investors are waiting for data on US inflation for April

LONDON – European stocks closed higher on Wednesday, with investors essentially shutting down expected inflation data outside the United States.

The pan-European Stoxx 600 temporarily closed up 1.6%, with autos leading the gains up 3.6% as all sectors except healthcare traded in positive territory, down 1.2%.

The gains in Europe come after some isolated trading sessions in the region and further away in the markets. European stocks climbed on Tuesday as global markets revived from broad sell-offs in recent days, mainly due to concerns over inflation and rising interest rates – and the prospect of a global recession.

On Wall Street, US stocks rose sharply on Wednesday despite the April consumer price index jumping 8.3%, higher than the 8.1% rise expected by economists surveyed by the Dow Jones. The price rise in March was close to 8.5% of the 40-year high.

Europe, we think, is at the center of the storm. We think the gas crisis is likely to get worse.

Salman Ahmed

Fidelity International, Global Head of Macro and Strategic Asset Allocation

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

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

Ukraine’s Gas TSO on Tuesday announced Force Majeur at its Sokhranivka gas metering station and Novoposkov Border compressor station, both located in the Russian-occupied territory of eastern Ukraine and responsible for about one-third of gas flows from Russia to Europe.

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Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC on Wednesday that his team weighed less stock across the board, but favored the United States than Europe.

“Europe, we think, is at the center of the storm. We think the likelihood of gas disruption could be even worse,” he added.

Overnight, shares in the Asia-Pacific region were mixed as investors reacted to the release of Chinese inflation data expected for April.

In Europe, German inflation rose to 7.4% year-on-year in April, the highest since 1981.

Before Bell, the company had expanded its earnings, including Alstom, Commerzbank, Continental, E.On, Siemens Energy, Thyssenkrupp and Tui.

Shares of Homeserv, a British home emergency repair company, have bounced more than 13% since Bloomberg came close to taking over Canada’s Brookfield Asset Management Company.

German engineering and steel conglomerate Tissenkrup added 11% after losing earnings expectations.

Swedish match shares rose 9% on Tuesday after the tobacco company agreed to a 16 billion sale to US giant Philip Morris International.

German biotech firm Evotech has lost more than 10% since its first quarter results.

Shares of German drugmaker Bayer fell 6% after the administration of US President Joe Biden asked the US Supreme Court not to consider the company’s application to dismiss a consumer claim that its roundup caused herbicides to cause cancer.

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