European Shares Rise, Key Euro Zone Data in Focus

Following a two-day decline, European shares are on the mend again as investors assess data on eurozone producer and consumer prices.

European shares rose on Thursday amid trader assessment of new economic and inflation activity data. This stock bounce comes after a two-day decline that saw the pan-European STOXX 600 index drop approximately 2%.

However, the STOXX 600 is currently up 0.4%, while the German DAX saw a 0.8% increase. In addition, the French CAC has climbed 0.9%, with the Italian FTSE MIB gaining 0.3%. The British FTSE 100 remains closed today and tomorrow in honor of the Queen’s Platinum Jubilee celebrations.

Data on European Shares Rise Reveals Luxury Stocks at Forefront of Surge

The latest ascension of European stocks was led by established names in the industrial and luxury space. For instance, French spirits group Remy Cointreau advanced by 3.5% exceeding full-year profit estimates. This upbeat development has led to a more positive outlook for the rest of 2022 and beyond.

Other French luxury stocks to see notable increases include outfits LVMH Moët Hennessy Louis Vuitton, and L’Oreal. In addition, Italian eyewear company EssilorLuxottica was also part of the fold. The value of the company’s respective stock increases ranged from 1.3% and 2.4%, substantially boosting the indexes.

The gains accrued by the industrial and luxury giants were only hampered by a retracement in energy stocks. Shares of oil companies dropped due to the global slippage of crude prices. This was triggered by speculation that leading oil-producing nation Saudi Arabia may increase production as prompted by the US. TotalEnergies, Equinor, and Shell’s Amsterdam listing all experienced declines ranging from 1.4% to 1.8%.

Euro Zone Outlook

Sustained worries over staggering economic growth also weighed heavily on positive optics. The rise of shares aside, European traders continue to keep a close eye on key data such as eurozone inflation numbers. These numbers hit an annual high of 8.1% in May, which exceeded expectations. Furthermore, the new eurozone inflation numbers mark a seventh consecutive record high. European traders are also monitoring the European Central Bank to ascertain the pace and scale of interest rate hikes. Investors consider this observation necessary because the central bank uses these hikes to contain consumer prices.

Investors are also looking out for due eurozone producer prices data for May. This would follow this week’s already announced high eurozone consumer prices. Commenting on the development, high-ranking economist Teeuwe Mevissen stated:

“Rises in the producer price indices will at least partially be transferred to consumer prices, and that normally takes between 8 and 12 months. This means that CPI will most likely stay on elevated levels for at least another 8 to 12 months.”

Investors will also be keeping tabs on US private employment as well as weekly jobless claims due later today.

US stock futures saw little to no change in the pre-trading session due to lingering economic concerns. Meanwhile, in the Asia-Pacific region, shares declined, with Hong Kong’s Hang Seng Index leading regional losses at 1.67%.

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