European stock markets saw modest gains on Wednesday, buoyed by news of a sharp rise in German industrial orders. The DAX index in Germany remained flat, while the FTSE 100 in the UK rose 0.2%, and France’s CAC 40 gained 0.1%. Although trading ranges are expected to be tight in Europe, the positive news from Germany and France provided hope for the region’s struggling manufacturing sector. German industrial orders soared 4.8% in February, while French industrial production rose 1.2% during the same period. However, investors remain wary, with concerns of recession on both sides of the Atlantic.
Meanwhile, the final Eurozone purchasing managers' index (PMI) data for the services sector in March, which is expected to show continued expansion, will be released today. In the corporate sector, Sodexo announced plans to spin off and list its Benefits & Rewards Services business in 2024, causing its stock to soar almost 9%. Other notable movers include Barry Callebaut, whose stock fell 2% after reporting a decline in first-half sales volumes, and H&M Hennes & Mauritz, whose stock rose 0.8% after Morgan Stanley upgraded its investment stance on the fashion giant.
Oil prices also rose, with industry data showing a fall in US crude inventories, extending a rally prompted by the weekend's unexpected OPEC+ output cut. U.S. crude oil futures traded 0.2% higher at $80.84 a barrel, while Brent crude climbed 0.3% to $85.19. Gold futures also rose 0.2% to $2,042.25/oz, while EUR/USD traded 0.1% higher at 1.0960.
Overall, the positive news from Germany and France provided a welcome boost for European stock markets, but investors remain cautious amid concerns of recession and uncertainty about the future. The release of today's Eurozone PMI data will be closely watched for further signs of economic growth.
