European stocks continued their rebound from Wednesday’s losses at the opening on Thursday as lower oil and gas prices gave some respite to investors.
The pan-European STOXX 600 index was up 1.05% with all regional bourses higher. Oil prices dropped fell again along with European gas futures.
Investors were also relieved over moves on the US debt ceiling front as US Senate Republican Leader Mitch McConnell announced plans to extend the borrowing limit into December.
Sentiment turned positive after the benchmark U.S. 10-year Treasury yield fell back d from more than three-month highs on Wednesday and US stocks rallied as investors bought the dip in tech stocks.
“Risk appetite has briefly returned for investors, although sentiment remains delicately poised,” said interactive investor Richard Hunter.
“Progress on debt ceiling talks in the US seems to suggest a temporary deal to avoid default, which gave markets a shot in the arm as the trading session progressed. At the same time, indications that Russia may be stepping up gas supplies also steadied energy prices, which have been the main culprit for the volatility which is currently being experienced.”
In economic news, German industrial output slumped by more than expected in August as supply chain disruptions weighed on Europe’s largest economy. Output fell 4% month-on-month after a 1.3% rise in July and a severe drop from the 0.4% decline forecast.
In equity news, French luxury goods maker Hermes jumped 3.1% after HSBC upgraded the stock to ‘hold’, driving rises in sector peers LVMH, Richemont and Kering.
French car parts maker Valeo climbed 4.5% after Citigroup upgraded the stock, citing limited downside risks as much of the auto production expectations have been revised.
Royal Dutch Shell inched ahead after reporting a $400m hit to earnings from soaring gas and electricity prices and Hurricane Ida, but noting that the same price rises would boost third quarter cash flow.
Swiss construction chemicals maker Sika gained after reporting it could overcome rising raw material costs and supply chain restrictions to increase its sales and profit margins this year.
TeamViewer shares continued to plunge, hitting the bottom of the Stoxx with a fall of 9.55% after a 25% slump on Wednesday, on the back of weak quarterly earnings and a cut to full-year guidance.
