- Tech stocks boost STOXX 600
- ECB officials back more 50 bps rate hikes
- Eurozone consumer confidence improves
- Symrise slides on EBITDA miss
Jan 23 (Reuters) – European stocks climbed on Monday, with technology firms spearheading gains, as optimism about the eurozone economy likely avoiding a steep recession overshadowed hawkish remarks from European Central Bank (ECB) officials.
The pan-European STOXX 600 (.STOXX) closed up 0.6%. The index had posted its first weekly decline of the year in the previous session on jitters around the earnings season and upcoming interest rate decisions from major central banks, including the European Central Bank.
The benchmark STOXX 600 index hit a nine-month high last week as a warm winter in Europe and China abandoning its tight COVID-19 rules brightened the outlook for Europe’s economy.
“The Chinese reopening is absolutely crucial. It now looks like we could avoid a recession and if we don’t, it looks likely to be a mild slowdown rather than anything worse and a lot of that has got to do with the potential growth in China,” said James Hart, investment director of Witan Investment Trust.
“If recession is avoided, demand for products such as German autos won’t be as negative as feared and companies like that are big customers to the chipmaking industry.”
Despite signs of easing inflation in the eurozone, ECB policymakers have remained hawkish, with governing council members Klaas Knot and Peter Kazimir backing the case for two more 50 basis point rate hikes.
Investors will look for more clues on the central bank’s tightening plans when ECB President Christine Lagarde speaks later in the day.
With the earnings season underway, investors are waiting to see if the results will continue to support the recent rally in markets.
Fourth-quarter earnings for STOXX 600 companies are forecast to have grown by 10.7% year-on-year, the slowest in two years, according to Refinitiv I/B/E/S data.
The S&P Global Purchasing Managers’ Index (PMI) survey, due on Tuesday, was expected to show an improvement in January eurozone business activity.
Euro zone consumer confidence improved in January from December, data on Monday showed.
Remy Cointreau (RCOP.PA) rose 3.3% after Citigroup upgraded the French spirits maker’s stock to “buy”.
Reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru; Editing by Sherry Jacob-Phillips and Alex Richardson
Our Standards: The Thomson Reuters Trust Principles.