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European shares climb as Norway oil strike ends

European shares climb as Norway oil strike ends 1

By Devik Jain and Susan Mathew

(Reuters) -European shares rallied on Wednesday after Norwegian oil and gas workers ended their strike, easing energy supply worries, while Just Eat jumped 15.5% after Amazon agreed to buy a stake in its Grubhub business.

The continent-wide STOXX 600 was up 1.7%, after ending 2.1% lower in the previous session when the strike in Norway threatened to cut energy supplies and severely dented the euro which continued its slide on Wednesday.

Gains were broad-based with consumer staples, and tech stocks among the biggest gainers. The energy sector declined as oil prices dropped to 12-week lows on recession fears. [O/R]

Stock markets have slipped this year on a constant flow of negative news ranging from talks of gas rationing in Europe, COVID-19 curbs in China and a political crisis in Britain.

The STOXX 600 has shed 16.5% so far this year as investors adjusted their expectations of corporate profits and economic growth in the wake of aggressive central bank moves to tame rising prices.

“The drop in the euro and weakness in yields shows that investors remain very nervous about the economic prospects of the global economy,” said Chris Beauchamp, chief market analyst at online trading platform IG.

“The opportunistic bargain hunting in stocks may not have much staying power.”

Data on Wednesday showed total retail sales in the euro zone slightly rose in May on the month, but below market expectations, with consumers cutting expenditure on food, drinks and tobacco.

Just Eat was among the biggest gainers on the STOXX 600 after Amazon agreed to take a 2% stake in U.S. meal delivery business Grubhub and said it would offer its Prime members access to the service for one year.

The deal will give Just Eat a kind of stability amid economic uncertainty ahead, said David Madden, market analyst at Equiti Capital.

Utility Uniper slid another 2.9% as Finnish parent Fortum said it was in talks with Germany to ease the company’s financial problems.

Separately, the S&P also placed Uniper and Fortum ratings on creditwatch negative.

Abrdn gained 5.1% after the British asset manager announced a 300 million pound share buyback programme.

Trainline climbed 20.6% after the UK rail operator forecast robust FY23 revenue growth as demand for travel rebounds.

Faurecia fell 6% after Barclays double-downgraded its rating on the French car parts maker’s stock to “underweight”.

(Reporting by Devik Jain, Bansari Mayur Kamdar and Susan Mathew in Bengaluru; Editing by Sherry Jacob-Phillips and Arun Koyyur)

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