European stocks broke a three-day streak of losses on Wednesday, with basic materials stocks up 4.5%, but the rally was contained after Russian energy giant Gazprom cut off gas supplies. to Bulgaria and Poland and after a drop in German consumer confidence.
Exacerbating Europe’s energy crisis, Gazprom stopped gas supplies to Bulgaria and Poland for not paying for gas in rubles, in the Kremlin’s toughest response yet to Western sanctions.
“Events about Russian gas exports to Europe are a reminder of the potential for an escalation of war…(and) looming over this market in the near term,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
“However, Europe still has many fiscal and diplomatic policy responses available to avoid an energy-induced recession, and based on current information, a European recession is not our base case.”
The pan-European STOXX 600 index rose 0.7% after hitting six-week lows at the open. Miners and oil stocks extended gains for a second straight day, with the former on track to recoup all of Monday’s 6% drop.
- In London, the Financial Times index advanced 0.53%, to 7,425.61 points.
- In Frankfurt, the DAX index rose 0.27% to 13,793.94 points.
- In Paris, the CAC-40 index gained 0.48% to 6,445.26 points.
- In Milan, the Ftse/Mib index appreciated by 0.63%, at 23,830.11 points.
- In Madrid, the Ibex-35 index rose 0.46% to 8,477.70 points.
- In Lisbon, the PSI20 index rose by 0.42%, to 5,886.34 points.
Source: CNN Brasil
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