European Markets Rebound from Morning Losses

Bridgette Randall
12 Jul, 2022
New York City

European markets reversed earlier losses and closed up amid the uncertainty linked to the future natural gas supply from Russia. 

Russia turned off natural gas flow through Nord Stream 1 pipeline for the previously announced scheduled maintenance for ten days. 

However, Germany and other European nations are bracing for an extended shutdown as the Ukraine war shows no signs of abating. 

Germany gets about one third of its natural gas from Russia. 

The DAX index rose 0.5% to 12,905.48, the CAC-40 gained 0.8% to 6,044.21, and the FTSE 100 index added 0.18% to 7,209.84. 

European markets opened lower as the energy crisis deepens in the region and worries of the faster U.S. interest rate hike after the release of inflation data on Wednesday. 

U.S. June consumer price inflation is expected to cross 8.6% reported in May stoking the fears of a 75 point rate hike at the next Fed's meeting on July 27. 

Business confidence index in Germany plunged more than expected in July, according to the data released by a private research institute. 

The ZEW Indicator of Economic Sentiment plunged to -53.8 in July from -28.0 in June, Leibniz Centre for European Economic Research reported on Tuesday. 

The weak confidence data also reflected in the currency trading and the euro dropped to 0.99 against a dollar briefly before recovering to close at $1.003.

The indexes rebounded in the late afternoon trading shaking off the worries of the future energy supplies and looked ahead to earnings season kicking off later this week.  

AkzoNobel rebounded from the morning loss of 1% to close up 1.5% to 63.52 euros and the Dutch paint company plans to invest 20 million euros in France to improve production at two locations. 

Thales SA increased 2.4% to 123.30 euros after the electrical systems developer agreed to acquire Dutch OneWelcome for 100 million euros. 

United Utilities Group rose 0.3% to 1,036.50 pence and the British utility company agreed to sell its renewable energy to SDCL Energy Efficiency Income Trust plc for about