European stocks closed higher on Thursday as oil and technology stocks rose, though gains were capped by growing concerns about a possible energy-crisis-induced recession.
- The pan-European STOXX 600 index rose 0.3%, supported by energy stocks, which rose 1.2% to hit a 12-week high as crude prices surged on growing supply concerns.
- Russia will cut off natural gas supplies to Europe via Nord Stream 1 for three days from August 31, increasing pressure on the region as it tries to replenish its deposits before winter.
- “Our year-end target for the STOXX 600 is 410 units, but downside risks are increasing with rising natural gas prices and the increased likelihood of Europe slipping into recession,” said Sutanya Chedda of UBS (SIX: UBSG ).
- Technology stocks rose 1%, following the lead of their counterparts across the Atlantic, as big growth stocks buoyed Wall Street, with attention on the annual Fed symposium in Jackson Hole.
- “Stocks rose after a largely indecisive day in which European indices buoyed while US tech giants provided positive leverage across the pond,” said Joshua Mahony of trading platform IG online operations.
- Germany’s DAX gained 0.4% after data showed its economy expanded 0.1% in the second quarter, beating expectations. An independent survey showed the economy will contract in the third quarter, while business confidence fell in August.
- The benchmark STOXX has lost nearly 11% this year as markets assess the impact of rapidly rising interest rates and runaway inflation on consumer spending and corporate profits amid the energy crisis.