European Markets Retain Positive Bias, ECB's Lagarde Highlighted Gradual Approach

Bridgette Randall
28 Jun, 2022
New York City

European market indexes advanced after China loosened travel restrictions for international travelers.

The ECB President Christine Lagarde played down recession risk in the euro zone and said that the central bank is ready to lift rates higher if inflation continues to accelerate but stressed gradual approach in tackling the price increases. 

"We are also seeing signs that the supply shocks hitting the economy could linger for longer. 

While it is reasonable to assume that global supply chain disruptions will gradually be resolved, the outlook for energy and commodities remains clouded," Lagarde added at the ECB Forum in Sintra, Portugal. 

"The appropriate monetary policy stance has to incorporate our principles of gradualism and optionality." Lagarde highlighted the central bank's approach. 

The DAX index increased 0.97% to 13,314.60, the CAC-40 index gained 1.3% to 6,128.01, and the FTSE 100 index advanced 1.4% to 7,355.09. 

Crude oil advanced 1.8% and traded $117.10 a barrel as economic activities resume in China after Shanghai and other regions in the country eased coronavirus mobility and social gathering restrictions. 

BP Plc and Shell Plc gained more than 3% after crude oil prices rebounded. 

Consumer confidence in Germany dropped to a new low and in France declined for the sixth month in a row. 

Consumer confidence forecast for July declined to 27.4 from the revised 26.2 in June and dropped to a record low since record keeping began in 1991, private market research group GfK said on Tuesday. 

Consumer sentiment in France declined for the sixth month in a row and dropped to a nine-month low. 

The index declined to 82 in June from 85 in May, the statistical office Insee reported on Tuesday in Paris. 

Volkswagen increased 1.7% to 141.06 euros after the company is nearing an agreement to sell its electric vehicle charging business to a unit of Siemens. The news was first reported by the Wall Street Journal. 

Petrofac Limited gained 3.0% to 122.70 pence after the energy services provider said revenues at its Asset Solutions division are running ahead of expectations on higher levels of new orders.  

Valeo SE gained 2.7% to 19.83 euros after the auto parts maker won a contract from BMW to provide an advanced driving assistance system for its electric vehicle scheduled to be released in 2025. 

Akzo Nobel declined 3.4% to 63.30 euros and the Dutch chemical company named Gregoire Poux-Guillaume as its new chief executive.