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European Stocks Largely Higher; Travel Stocks Slump By Investing.com

European Stocks Largely Higher; Travel Stocks Slump By Investing.com

© Reuters.

By Peter Nurse 

Investing.com – European stock markets largely edged higher Tuesday, but gains are limited after disappointing growth data out of China and with travel stocks hit hard by new Covid-related restrictions.

At 3:40 AM ET (0740 GMT), the in Germany traded 0.5% higher, the in France rose 0.1%, while the U.K.’s dropped 0.1%.

Data released earlier Tuesday brought China’s economic recovery into question, with factory activity expanding at a slower pace in August and the services sector tumbling into contraction territory. 

The mobility restrictions that were imposed to stop the recent new outbreak of Covid-19, coupled with high raw material prices and supply constraints, pushed the country’s down to 50.1 in August, from 50.4 in July. It’s now six months since China’s PMI peaked.

The tumbled to 47.5, from 53.3, below the 50-mark indicating growth and the lowest reading since February 2020.

Also weighing on sentiment in Europe was the decision by the EU to remove the United States from its safe travel list. The United States, on its part, has issued a “do not travel” advisory for several European nations.

IAG (LON:) Group, the owner of British Airways, saw its stock fall over 3%, Air France KLM (PA:) stock fell 1.2% and Deutsche Lufthansa (DE:) stock dropped 1.3%, overshadowing comments from CEO Carsten Spohr who said the German carrier will generate positive cash flow this summer.

In other corporate news, Vivendi (OTC:) stock fell 0.7% after the French conglomerate agreed to sell an additional 2.9% of Universal Music Group to Pershing Square for $1.15 billion, while Bunzl (OTC:) stock fell 1.8% after the U.K. wholesaler released half-year results and an unchanged outlook.

French surprised on the upside in August, rising 0.7% from July, giving a 12-month inflation rate of 2.4%, the fastest rate in nearly three years. There are more important economic releases due Tuesday, including data and numbers, both for August. 

Still, European stocks continue to benefit from the dovish nature of Federal Reserve Chairman Jerome Powell’s speech at the virtual Jackson Hole symposium on Friday, when he declined to provide a firm timetable for tapering asset purchases.

Many had expected the Fed chief to pinpoint the beginning of the end for the central bank’s unprecedented monetary support in the wake of the coronavirus outbreak.

Crude prices stabilized Tuesday in the aftermath of Hurricane Ida hitting the U.S. Gulf Coast, with the prospect of extended refinery outages, and consequently reduced crude demand, balancing out the temporary hit to supply from the suspension of output of rigs in the Gulf of Mexico. Wholesale gasoline prices also appear to have peaked, unwinding around half of last week’s gains. 

Hurricane Ida hit output at six refineries in Louisiana that process almost 2 million barrels per day of crude, around 12% of U.S. refining capacity.

The market is also awaiting the latest meeting of the Organisation of Petroleum Exporting Countries and their allies, with the group, known as OPEC+, expected on Wednesday to agree to add another 400,000 barrels per day of supply each month through December.   

By 3:40 AM ET, futures traded 0.1% lower at $69.17 a barrel, while the contract was mostly unchanged at $72.22.

Additionally, rose 0.3% to $1,818.05/oz, while traded 0.3% higher at 1.1825.

 

Source: www.investing.com

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