LONDON (Reuters) – European shares gained for a second straight session on Wednesday, as strong corporate earnings and a rise in sensitive sectors of the economy boosted sentiment after US inflation growth slowed sharply in April.
The pan-European Stoxx 600 index rose 1.7 percent at the close, posting the biggest percentage gain since late March. The mining, auto industry and oil and gas sectors each jumped more than 3 percent.
Investor sentiment was supported by a batch of upbeat earnings reports and merger activity.
Sweden’s Match shares jumped 9 percent after Philip Morris International announced that it would make a cash offer to buy the Swedish tobacco company, amounting to about 161.2 billion Swedish crowns (16 billion dollars).
Shares of German thyssenkrupp group jumped 11.2 percent after it raised its forecast for sales and operating profits for 2022, while shares of Britain’s Compass Group rose 7.4 percent with an increase in its annual revenue forecast.
European Central Bank President Christine Lagarde said on Wednesday the bank was likely to end its bond-buying stimulus program as early as the third quarter of this year, followed by an interest rate hike that could come “a few weeks”.
Data showed that US consumer price growth slowed sharply in April as gasoline prices fell from record highs, indicating that inflation is likely to have peaked. But it is likely to remain elevated for a while, keeping the Federal Reserve (the US central bank) on a path of raising interest rates.
Shares in French train maker Alstom lost 5.2 percent after the market was divided over comments about cash flows.
Germany’s Bayer shares fell 6.2 percent after the US administration asked the Supreme Court not to consider the agrochemical and pharmaceutical company’s lawsuit to dismiss lawsuits filed by clients who said the company’s weed killer Roundup causes cancer.
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