European shares edge higher as energy, bank stocks gain; US inflation data eyed (updated)

Rational AG

08/05/2023 09:26

(For a Reuters live blog on U.S., UK and European stock
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        * 
      STOXX 600 up 0.2%
    

        * 
      Energy, bank stocks lead gains
    

        * 
      German industrial production falls in March
    

        * 
      Rational falls as Baader Helvea cuts rating
    

  
 (Updates prices, adds comment, details on U.S. data in
paragraphs 5 and 6, Germany's industrial data in paragraph 9)
    By Amruta Khandekar
       May 8 (Reuters) - European shares edged higher on
Monday, with energy and bank stocks spearheading gains, but were
range-bound ahead of key U.S. inflation data due later in the
week that would offer more cues on the Federal Reserve's
monetary policy path.
    The pan-European STOXX 600  .STOXX  rose 0.2% to 466.29
points by 0805 am GMT.
    The index was pressured last week when, unlike the Fed, the
European Central Bank signalled more rate hikes were on the
table. A slump in energy shares on weakness in crude prices also
added to the declines.
    Energy  .SXEP  was the top sectoral gainer on Monday, up
0.8% as crude prices strengthened. Banks  .SX7P  and healthcare
shares were in tow, gaining 0.6% and 0.5% respectively.   
    After a solid U.S. monthly jobs report last week, the focus
turned to April's consumer prices reading due on Wednesday for
clues on whether rate cuts in the world's largest economy were
likely soon.
     Additionally, the Fed's Senior Loan Officer Opinion Survey
due later on Monday will be parsed for clues on the state of
lending, given the recent turmoil among regional banks in the
U.S.
    Wednesday's inflation data, which is expected to show core
prices rose 0.4% month over month, is unlikely to support the
case for rate cuts, said Mark Haefele Chief Investment Officer,
UBS Global Wealth Management in a note.
  "In the other direction, the Senior Loan Officer Opinion
Survey is almost certain to show that large numbers of banks are
tightening their lending standards."
     Meanwhile, data showed German industrial production fell
more than expected in March, partly due to a weak performance by
the automotive sector, again spurring recession fears in
Europe's largest economy.
    Germany's DAX index  .GDAXI.  was flat. 
    Stock markets in London were closed for a holiday on Monday
following the coronation of King Charles on Saturday.
    Dutch Central Bank President Klaas Knot on Sunday said the
ECB's rate hikes are starting to have an effect, but more will
be needed to contain inflation.
    Among other movers, shares of Rational  RAAG.DE  fell 1.6%
after Baader Helvea cut the German industrial kitchen equipment
maker's rating to "reduce" from "add."
    Wacker Chemie  WCHG.DE  rose 1.3% on Monday after the German
chemicals company said it acquired 100% of the shares of
contract manufacturing company ADL BioPharma.
    In a light day for earnings, PostNL  PTNL.AS  jumped 10.4%
as the Dutch postal firm affirmed its 2023 outlook after
reporting a smaller-than-expected drop in first-quarter parcel
volumes.
 Spanish pharmaceutical firm Almirall SA  ALM.MC  rose 1.6%
after its first-quarter core earnings beat analysts' estimates.
    
    

 (Reporting by Amruta Khandekar; Editing by Sherry
Jacob-Phillips and Janane Venkatraman)
 ((Amruta.Khandekar@thomsonreuters.com;))