European stocks rebounded on Friday after heavy losses in yesterday’s session, paring losses for the week as investors were undeterred by worse-than-expected economic data from China that fueled fears of a global recession.
In particular, according to macroeconomic data released today by China, the country’s economy slowed down unexpectedly in June.
China’s GDP grew at a rate of 0.4% in the second quarter of the year, significantly below estimates that had expected the Chinese economy to grow by 1%. At the same time, the country’s industrial production in June also missed expectations, showing a rise of 3.9% compared to the previous year, against the forecast for 4.1%.
However, retail sales in June rose 3.1%, recovering from the recession that preceded it, well beating estimates that had expected it to be unchanged from last year.
Back in Europe, EU car sales posted their worst June in decades, down 17%, which may bode well for European economies’ battle with soaring inflation as it points to curbing demand. .
The political news is dominated by the governmental crisis in Italy, after on Thursday the Prime Minister Mario Draghi submitted his resignation to the President Sergio Mattarella, who, however, did not accept it and asked him to appear before the Parliament, to ascertain whether he has the confidence of the President .
Next Wednesday, Draghi will address the House and the Senate, and then a new vote of confidence is expected, after he won yesterday but with the abstention of the 5 Star Movement senators, which made the technocratic prime minister declare that “the majority of national unity that supported this government no longer exists”.
Political turmoil in Italy has sparked a fresh rise in government bond yields in Europe’s third-largest economy, with the 10-year spread (the deviation of the yield from its German equivalent) as high as 220 basis points, rekindling fears of a so-called fragmentation of the eurozone economy.
In this climate, the pan-European Stoxx 600 rose 1.79% to 413.78, with autos jumping 4% to lead gains. In the week the index gathered its losses to 0.8%.
In the individual boards, the German DAX marked a “jump” of 2.76% to 12,864.72 units, the French CAC 40 strengthened by 2.04% to 6,036 units, and the British one FTSE 100 showed gains of 1.69% to 7,159.01 units.
A similar picture in the European region, where in Spain the IBEX 35 rose 1.81% to 7,945.90 units, and in Italy the FTSE MIB recovered some of the big losses of 3.4% yesterday, closing today at +1.84% and 20,933.26 units.
In the individual shares Germany’s Uniper jumped 6% after Fortum, the Finnish company with the majority stake, reportedly said it was forced to consider all options to ensure smoothness in European energy markets.
At the top of the European index, however, was the Swedish IVF company Vitrolife, with a rally that exceeded 15% after the announcement of strong EBITDA.
Swedish engineering company Sweco tumbled more than 16% and – also Swedish – medical technology company AddLife fell 10% after it reported weak results for the second quarter.
Source: Capital
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