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European stock market rallies

Relevance up to 07:00 2022-03-11 UTC–5

The European stock market showed growth at the close of trading on Wednesday. The STOXX Europe 600 gained 4.68%. The German DAX and the French CAC 40 showed the biggest growth, which increased by 7.92% and 7.13%, respectively. The FTSE 100 climbed by 3.25%, the Spanish IBEX 35 gained 4.88%, and the Italian FTSE MIB soared by 6.94%.

European stock indicators showed two-year high increases. In addition, the indicators had been declining for the previous four days, during which they plummeted by 6.5-8.6%.

Investors were buying cheaper shares after reports about restrictions on energy imports from the Russian Federation. Such a decision was announced by the US authorities the day before. European countries are also considering the possibility of replacing energy supplies from Russia with domestic fossil fuels.

Investors are expecting the results of today’s ECB meeting, which will address rising inflation and new problems caused by the Russian-Ukrainian conflict. According to the president of Ukraine, he no longer wants Ukraine to join NATO and is ready to discuss with the Russian side the status of the DNR and LNR.

The conflict between Ukraine and Russia contributed to the previous sharp drop in the indicators. However, investors still hope that the parties will be able to reach an agreement. According to a statement by the Russian Foreign Ministry, they would prefer a peaceful way to resolve the disagreements between the two countries and give Ukraine a neutral status through negotiations. The global political community perceives this statement as the desire of the Russian side to stop the military special operation in Ukraine.

Another factor also contributed to the growth of European indicators. The banking sector of the region demonstrated growth of 7.5%. Due to this, securities of the largest European banks rose in price: Barclays rose by 6.3%, Deutsche Bank climbed by 7.5%, HSBC soared by 4%, and UniCredit increased by 11.7%.

The UK companies in the tourism sector and the airlines showed strong growth. Thus, the shares of International Consolidated Airlines rose by 11%, InterContinental Hotels increased by 6.7%, Wizz Air jumped by 15.6%, and EasyJet soared by 12.6%.

With excellent reporting over the past year, namely a 15.2% increase in profits, the German company Adidas AG was able to increase its dividend payments by 10%. The value of its securities rose by 13.6%.

Another German company, Continental AG, also reported a net profit for last year and resumed paying dividends to its shareholders. This had a positive effect on the value of its securities, which gained 6%.

Deutsche Post AG’s stock rose by 12.5% thanks to a 14% increase in net profits in the previous quarter and the announcement of a EUR2 billion buyback program.

As a result of Prudential Plc’s 16% increase in operating profit over the previous year, the value of its securities rose by 8.6%. Experts attribute this to the company’s strengthening position in Asia.

In spite of the European sanctions against Russia, Polymetal announced that it will continue cooperation with Russia and Kazakhstan, as well as its intention to pay the shareholders the promised amount of dividends. Thanks to this, the company’s securities went up by 69.2%.

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