European markets make a cautious start to August trading; HSBC up 6%

European markets make a cautious start to August trading; HSBC up 6%

LONDON — European stocks were quiet on Monday to start the new month as investors digested a fresh round of corporate earnings.

The pan-European Stoxx 600 hovered slightly above the fixed line by mid-morning, with banks adding 1.9% while construction and materials stocks fell 0.4%.

The mixed trade for European stocks comes after markets in the region ended July higher on Friday and recorded their best month since November 2020.

Investors digested a fresh band of corporate earnings and key eurozone economic data last week, with data released last Friday showing an acceleration of economic growth in the eurozone in the second quarter, despite the worsening gas crisis and record inflation.

The 19-member bloc posted a 0.7% rise in gross domestic product, beating growth expectations of 0.2% and contrasting sharply with negative annualized readings from the United States in the first and second quarters.

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Elsewhere in the night, US Stock Futures fell after Wall Street’s best month since 2020 as investors await another week of earnings reports and key economic data, particularly Friday’s nonfarm payrolls report from the Bureau of Labor Statistics, which will give more information on the strength of the labor market.

So far this year, solid job growth has prompted economists to say that the United States currently not in recessioneven with two consecutive quarters of negative GDP.

In Asia-Pacific marketsMainland Chinese stocks rose along with most other regional indices on Monday, as a private survey of Chinese factory activity showed slight growth.

Monday’s earnings came from HSBC, Pearson, Heineken and Erste Group.

Pearson shares jumped more than 6.6% in early trade to edge out the Stoxx 600 after the UK education and publishing company posted strong quarterly results, while HSBC climbed 6% after raising its key profitability objective.

At the bottom of the European blue chip index, the Swedish real estate company SBB fell 6.2% after Goldman Sachs downgraded the stock from “neutral” to “sell”.

On the data front, euro zone manufacturing activity contracted in July, the S&P Global’s final manufacturing PMI (Purchasing Managers Index) showed on Monday, bolstering fears that the bloc could slide lower. recession.

– CNBC’s Carmen Reinicke and Abigail Ng contributed to this market report.

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