European Stocks Trade Higher Near Record

European stocks traded close to record highs on Thursday, supported by a modest decline in oil and gas prices that helped ease concerns over energy costs. The STOXX 50 gained around 0.5%, while the broader STOXX 600 added 0.2%. Stabilising energy prices improved investor sentiment and reduced some of the pressure on inflation expectations. UK economic data also offered encouragement, showing that the region’s economies have so far proved resilient to the energy shock. UK GDP expanded by 0.4% in the second quarter, while growth strengthened in June. Corporate earnings provided an additional boost. Danish shipping giant Maersk surged around 8% after significantly exceeding profit expectations and raising its full-year earnings guidance, reflecting strong performance in its core businesses. Meanwhile, Entain and Danish offshore wind developer Orsted also reported first-half core profits above expectations.

European equity markets were set for a higher open on Thursday as subdued US inflation data reduced expectations for a Federal Reserve interest rate hike in September. In Europe, data showed the UK economy expanded 0.4% quarter-on-quarter in the three months to June, slowing from 0.5% growth in Q1 but matching market expectations. Investors will also turn their attention to Eurozone industrial production for June and Spain’s final inflation figures for July. In corporate news, Danish shipping giant Maersk raised its full-year underlying Ebitda guidance to a level above analyst expectations. Other European companies scheduled to report earnings include E.On, RWE, Antofagasta, Birkenstock and Nomad Foods. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both up around 0.4%.

Both the STOXX 50 and STOXX 600 gaining 0.1% on Wednesday after a lacklustre opening. The move followed gains on Wall Street after an in-line US CPI report reinforced expectations that the Fed is unlikely to need to raise interest rates in the near term. However, uncertainty surrounding the situation in the Middle East continued to weigh on sentiment and limited gains. Meanwhile, the earnings season is drawing to a close, although several companies continued to report results. ABN AMRO surged more than 5% after beating expectations across the board, while Vestas jumped almost 20% after reporting higher revenue. The tech sector was among the top performers, benefiting from a broader global tech rally after CoreWeave reported better-than-expected sales growth. ASML Holding rose 2.1%, Infineon Technologies gained 3.7%, Siemens Energy advanced 4%. Luxury stocks, meanwhile, came under pressure, with LVMH falling 2.5% Hermes declining 1.5%, and Kering dropping 2.9%.