Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

European shares bounce back from three-week lows on banks, utilities boost

Published 01/04/2024, 03:24 AM
Updated 01/04/2024, 12:08 PM
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, December 29, 2023.    REUTERS/Staff/File Photo
STOXX
-

By Shashwat Chauhan and Ankika Biswas

(Reuters) -European shares recouped some losses on Thursday after hitting three-week lows in the previous session, with banks and utilities leading the charge as investors assessed the latest economic data across the continent.

The pan-European STOXX 600 ended 0.7% up after falling for two straight days and touching its lowest level since Dec. 13 on Wednesday.

Leading the rebound were banks, which added 1.7%, while utilities advanced 1.5%.

Healthcare continued its strong run, rising 1.4%, taking its tally of consecutive days of gains to five.

On the downside, retail dropped 0.8% as Britain's JD (NASDAQ:JD) Sports Fashion tumbled 23.0% after the sportswear retailer lowered its full-year profit forecast, sending shares of German sportswear makers Adidas (OTC:ADDYY) and Puma down 3.0% and 5.9%, respectively.

Technology fell 0.4%, logging its fifth straight day of declines.

On Thursday's data front, German inflation rose in line with expectations in December due to base effects, while French consumer prices also rose in December, matching expectations.

"It remains to be seen, though, if this trend will persist in light of the still relatively moderate weakening of the labour market," said Stefan Schilbe, chief economist at HSBC Germany.

"With the labour market certainly not falling off a cliff - employment is still close to the all-time high - the inflation risks from wage increases in the upcoming wage rounds are not entirely negligible."

A separate reading showed contraction in euro zone business activity continuing at the end of 2023.

Focus would now shift to a preliminary inflation estimate of the broader euro zone due on Friday.

Sentiment was also boosted by data showing China's services activity expanded at the fastest pace in five months.

In the United States, data showed weekly jobless claims fell more than expected last week which comes a day after the minutes of the U.S. Federal Reserve's December policy meeting showed a growing sense that inflation is under control and rising concerns about economic risks from a restrictive monetary policy.

The question on investors' minds now is whether the previous year's rally, broadly built on the back of escalating bets of interest rate cuts, will extend into 2024.

Among individual stocks, Leonardo gained 5.7% after Bernstein upgraded its rating on the Italian defence and aerospace company, while British clothing retailer Next jumped 5.8% after raising its profit forecast for its current fiscal year.

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, December 29, 2023.    REUTERS/Staff/File Photo

Evotec slumped 18.3% after the German biotechnology firm announced the "surprising" departure of its long-term CEO.

Shipping companies Hapag-Lloyd and Maersk extended gains to a fourth session, rising 14.8% and 4.0%, respectively.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.