Investing
European Stocks Stabilise After Inflation-Driven Rout
Published by Wanda Rich
Posted on June 14, 2022
2 min readLast updated: February 6, 2026
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(Reuters) -European equities inched higher on Tuesday as investors snapped up beaten-down shares following a bruising selloff in the previous session on worries over aggressive U.S. interest rate hikes and a potential recession.
(Reuters) -European equities inched higher on Tuesday as investors snapped up beaten-down shares following a bruising selloff in the previous session on worries over aggressive U.S. interest rate hikes and a potential recession.
The continent-wide STOXX 600 index edged up 0.1% after sliding 2.4% to over three-month lows on Monday.
Battered banks and oil & gas stocks led sectoral gains in Europe, while real estate fell the most.
Wall Street’s benchmark S&P 500 index had confirmed on Monday it is in a bear market, or a 20% drop from its record closing high, on growing fears that the expected aggressive rate hikes by the U.S. Federal Reserve would push the economy into a recession. [.N]
Focus is on the Fed’s policy decision due on Wednesday, with many expecting a big three-quarter-percentage point rate hike following hot inflation print last week.
“The risks of a Fed-induced recession have increased, in our view, and the chances of a recession in the next six months have risen,” Mark Haefele, chief investment officer at UBS Global Wealth Management said in a note.
“Historically, during periods when inflation has been above 3%, value sectors have outperformed. We favor the energy sector and the UK market, which is heavily weighted to value stocks.”
Caught in a broader selloff, the benchmark STOXX 600 has shed almost 17% since hitting an all-time high in January as investors grapple with record-high inflation in the euro zone, tightening financial conditions and a slowdown in China’s economy.
Oil & gas stocks edged 0.7% higher as crude prices rose about $1 per barrel on concerns about tight global supplies. [O/R]
Among single stocks, German business software group SAP edged 0.5% higher after U.S. firm Oracle Corp post upbeat quarterly results, helped by soaring demand for its cloud products.
Shares of Atos plunged 18.7% after the French IT company revealed a plan to split its operations and sell assets as well as the departure of Chief Executive Officer Rodolphe Belmer.
Dutch paints and coatings maker Akzo Nobel dropped 5% after warning of a hit to operating income due to lockdowns in China and weak demand for decorative paints in Europe.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips)
Frequently Asked Questions about European stocks stabilise after inflation-driven rout
1What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured annually.
2What is a bear market?
A bear market is a period in which the prices of securities fall by 20% or more from recent highs, often associated with widespread pessimism.
3What are interest rates?
Interest rates are the amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal.
4What is the STOXX 600 index?
The STOXX 600 index is a stock market index that represents the performance of 600 large, mid, and small-cap companies across 17 European countries.
