European markets open higher following upbeat PMI readings

Soegeefx AppsEU MarketEuropean markets open higher following upbeat PMI readings

Elliot Smith

LONDON — European markets were higher at the open, as investors assessed China’s reopening and awaited minutes from the latest U.S. Federal Reserve policy meeting.

European markets

.FTSE FTSE 100 7591.13 139.39 1.87
.GDAXI DAX 14169.69 100.43 0.71
.FCHI CAC 40 Index 6639.32 44.75 0.68
.FTMIB FTSE MIB 24346.78 188.5 0.78
.IBEX IBEX 35 Idx 8424.5 54.8 0.65

The U.K.’s FTSE 100 rose 0.8% in early trade, while Germany’s DAX index nudged up 0.2% and France’s CAC 40 was flat.

Overall, the pan-European Stoxx 600 was up around 0.5%, led by travel stocks, which added 1.2%.

U.K. markets were closed Monday, but shares across the rest of the continent rose as euro zone manufacturing data indicated that the worst had passed for the 20-member currency bloc.

The figures offered hope of a light at the end of the tunnel, after a year beset by recession fears as central banks around the world hiked interest rates aggressively to rein in soaring inflation.

Markets in Asia-Pacific were mixed overnight as investors weighed the short-term implications of the rise in coronavirus infections in China against the potential longer-term boost from the full reopening of the world’s second-largest economy.

The Caixin purchasing managers’ index showed further declines in factory activity on surging Covid infections, but the survey also put business confidence around the 12-month outlook for output at its highest level since February 2022.

Global investors will have one eye on the minutes from the Fed’s December policy meeting, due to be published on Wednesday.

The central bank hiked rates by 50 basis points in December following four consecutive 75 basis point increases, and markets will be keen to gauge the likely trajectory of monetary policy in 2023.

Stocks on the move: Tui and travel stocks lead pack; GTT slips

Package holiday company Tui topped the Stoxx 600 in early trade, rising around 5%. The first week of the year generally sees a spike in bookings.

The travel sector was the stand-out performer in the index, up 2.4% amid an overall rise of 1.1%.

Engine-maker Rolls-Royce was also buoyed, overtaking Tui by the end of the first hour of trade with a 6.1% gain.

At the bottom of the index, French naval engineering firm Gaztransport et Technigaz fell 4.5% after announcing the end of its operations in Russia.

— Jenni Reid

Here are the opening calls

Britain’s FTSE 100 is set to start the year around 13 points higher at 7,465, Germany’s DAX is set to shed around 57 points to 14,012 and France’s CAC 40 is seen around 37 points lower at 6,558.

Oil prices to fall to $70-levels by end of 2023, says analyst

The price of Brent oil will fall to the lower end of $70 a barrel by year’s end, according to Citi’s global head of commodities research, Ed Morse, adding volatility surrounding the oil markets will remain.

“We’re expecting volatility to be about what it was last year,” said Morse. “We’re looking at Brent prices going down by the end of the year to the low 70s,” he estimated.

A number of oil producing countries are facing extreme difficulties, Morse said. He also expects demand for oil to be kept low due to a prolonged recession in China.

Developments on Russia’s war on Ukraine will also add onto volatility in prices, Morse added.

Brent crude dipped 0.43% to $85.57 a barrel. The U.S. West Texas Intermediate crude traded down 0.39% to $79.95. 

—Lee Ying Shan

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