European Stocks Higher; Eurozone PPI Data Due
By Peter Nurse
Investing.com - European stock markets climbed higher Tuesday, building on the previous session’s positive start to the new quarter.
By 03:45 ET (07:45 GMT), the DAX in Germany traded 1.9% higher, the CAC 40 in France rose 2.3%, and U.K.’s FTSE 100 climbed 1.1%.
European equities have started the new quarter on an upbeat note, bouncing after the sharp losses of the third quarter caused by concerns over slowing growth and aggressive monetary policy tightening.
“Investors are starting to doubt central banks globally will remain aggressive with fighting inflation as financial stability risks are growing,” said Ed Moya, an analyst at Oanda.
Helping the tone was the decision of the U.K government to reverse proposed tax cuts for top earners. That said, this only rules out a small percentage of the planned 45 billion pounds of unfunded tax cuts announced last week, and seriously undermines the authority of both the Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng.
Also helping sentiment was Australia's central bank raising interest rates by a smaller-than-expected 25 basis points earlier Tuesday.
The economic data calendar is largely empty Tuesday, although investors will keep an eye on the August Eurozone PPI for further clues on the inflationary pressures in the region. The index is expected to rise 4.9% on the month and to be up 43.1% on an annual basis.
In corporate news, Greggs (LON:GRG) stock rose 8% after the British fast food chain showed resilience against the backdrop of a worsening cost of living squeeze, with its total sales rising 14.6% over the 13 weeks to Oct. 1 year-on-year.
Made.Com (LON:MADE) stock soared over 20% after the online furniture store said it started talks with a “number of interested parties” regarding the sale of the company.
On the flip side, Metropole Television (EPA:MMTP) stock fell 8% after Bertelsmann's RTL Group scrapped a plan to sell its controlling stake in the French TV company.
Oil prices edged higher Tuesday, continuing the previous session’s positive tone as the market looks forward to Wednesday’s OPEC+ meeting amid expectations of a substantial cut in crude production.
The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are scheduled to meet tomorrow, and speculation is rife the cartel will agree to an output cut of more than one million barrels a day.
The move would be the biggest supply cut since the COVID-19 pandemic, and comes after a drastic fall in oil prices since the middle of the year.
By 03:45 ET, U.S. crude futures traded 0.2% higher at $83.83 a barrel, while the Brent contract rose 0.3% to $89.12. Both benchmarks gained more than 4% on Tuesday, the largest daily gain since May.
Additionally, gold futures rose 1% to $1,718.55/oz, while EUR/USD traded 0.6% higher at 0.9881.
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