On Monday, the key European indices recovered after a significant decline last week and showed a permanent increase amid strong Germany's statistical data. Thus, at the moment of writing the article, the STOXX Europe 600 composite index of Europe's leading companies rose by 0.26% to 432.24 points. The index lost 0.6% over the past week due to investors' concerns about the prospects of economic growth amid rising inflation, tightening of monetary policy by the world's major central banks, the tense geopolitical situation in eastern Europe as well as large-scale restrictive measures in China. The shares of Swiss biopharmaceutical company Idorsia Ltd and Polish insurance company Powszechny Zaklad Ubezpieczen showed record gains among the components of the STOXX Europe 600. They rose by 6.5% and 4.7% respectively. On the contrary, the shares of Swiss pharmaceutical company Vifor Pharma, British independent forensic services company Intertek Group Plc and Norwegian IT company Adevinta ASA recorded maximum losses. They fell by 5.3%, 4.6%, and 4.4% respectively. The French CAC 40 gained 0.07%, the German DAX added 0.67% and the British and FTSE 100 rose by 0.69%.
At the time of writing the article, the quotes of German energy company Siemens Energy increased by 0.3%. The main catalyst for rising share prices was the news that Siemens Energy made an offer to buy out all the stocks of its subsidiary company Siemens Gamesa Renewable Energy SA, which specializes in the manufacture of wind turbines. In response to the news, Siemens Gamesa's share prices soared by 6.5%.
Main catalysts for growth
On Monday, European stock market participants focused on Germany's positive economic data. According to the latest information, this month the IFO German business climate index (the indicator of confidence of German entrepreneurs in the state economy) rose to 93 points from 91.8 points in April despite concerns about the permanent growth of inflation and the military Russia-Ukraine conflict. At the same time, experts forecasted a drop in the index to 91.4 points. Meanwhile, the news from the major companies non-euro area members caused a rise in the British FTSE 100 today. Therefore, the stocks of the largest home and DIY retailer Kingfisher surged by 2.23%. The main reason for the sharp rise in shares was the announcement of the buyback program by the company's management as well as the report of strong financial results for the first quarter and confirmation of the annual forecast. Investors will be focused on the results of the world economic forum in Davos held during the current week. Moreover, on Wednesday the publication of the minutes of the US Federal Reserve's meeting in May is scheduled.
Outcomes of previous session
As for the outcomes of trading last Friday, European stock indices gained. However, they declined for the last five days. On Friday, investors evaluated statistical data in the euro area and analyzed the corporate reports of the leading European companies. Consequently, the STOXX Europe 600 composite index of Europe's leading companies rose by 0.73% to 431.1 points. The stocks of British retail e-commerce company THG Plc added 24.5% and showed record gains among the components of this stock index. The French CAC 40 rose by 0.2%, the German DAX added 0.72% and the British FTSE 100 went up 1.2%. The shares of French energy company Electricite de France increased by 1.4%. Stock prices of Swiss jewelry maker Cie. Financiere Richemont SA plummeted by 13.1%, despite a 61% increase in net income and a 46% rise in revenue in the current fiscal year. The market capitalization of German clothing and accessories manufacturer Hugo Boss AG sank by 1.3%. Earlier, the Managing Board of Hugo Boss announced the resignation of its chief operating officer Heiko Schaefer. The shares of Swiss insurance group Zurich Insurance fell by 0.4% on news about the company's departure from the Russian market. On Friday, the UK Office for National Statistics reported that retail sales in the country grew by 1.4% in April compared to March. At the same time, analysts predicted the fall of the index by 0.3%. Meanwhile, the consumer confidence index fell by 2 points in May compared to April. It dropped by 40 points. The index has been the lowest since 1974. At the same time, market experts expected it to decline only by 39 points. The news came on Friday that in May China's central bank planned to lower the five-year loan prime rate (LPR) to 4.45% from 4.6% in April. This news became favorable for global stock markets. Market participants perceived softening of the monetary policy by the Chinese regulator as strong support for the economy suffering from the COVID-19 pandemic and its restrictive measures. Moreover, the decline in the prime rate by 15 basis points was considered a record since the rate reform in 2019.
