Europe close: Shares rally as US markets rebound after Tuesday rout
By Frank Prenesti
Date: Wednesday 27 Apr 2022
(Sharecast News) - European stocks rallied to close higher on Wednesday as US markets rebounded in early trade from the previous session's rout amid worries over gas supplies as Russia turned off the taps to Poland and Bulgaria.
The pan-European Stoxx 600 index finished 0.73% with all major bourses in positive territory as strong earnings drove sentiment. US stocks plunged overnight, with investors worrying over a fresh surge in Covid-19 cases in China, high inflation, and the potential threat of nuclear war as a result of Russia's invasion of Ukraine.
Investors also fretted over energy supplies as Gazprom announced it was halting gas supplies to Bulgaria and Poland for failing to pay for gas in roubles in part of Moscow's counter offensive against Western Sanctions over its unprovoked invasion of Ukraine.
"It's been another choppy session for markets in Europe with today's attempt at a rebound once again being capped by concerns that Russia will expand its insistence on being paid in roubles beyond Poland and Bulgaria, to the likes of Germany and Italy," said CMC Markets chief market analyst Michael Hewson.
"This seems the most likely outcome given reports by (Russian news agency TASS), which Austria have strenuously denied, that they have agreed to pay Russia in roubles."
"Whether true or not, it appears that Russia is striving to create division by cranking up the pressure on European countries to pay in roubles or risk being cut off. This new strategy, which has been a long time coming, appears to be a concerted effort to force European countries to breach sanctions, and has been variously described as weaponization or blackmail, but however you describe it, extortion seems a more appropriate description."
In equity news, shares in Swiss chemicals company Clariant surged after it concluded its probe of whistleblowers' allegations that some staff manipulated accounts in 2020 and 2021 to help meet financial targets, and found o impact on sales and cash previously reported.
Meal kit company HelloFresh soared to the top of the Stoxx with a 11.5% rise as it said first-quarter adjusted core earnings and revenue would be above market expectations.
Swedish banks SEB and Svenska Handelsbanken both jumped after upbeat first-quarter earnings.
Mining stocks gained on the back of a recovery in metals prices, with Anglo American, Rio Tinto, Glencore and Antofagasta, after a strong recovery in Chinese markets.
GlaxoSmithKline shares gained after reporting strong first-quarter sales of £9.8bn, a rise of 32%, as the company's shingles treatment and Covid-19 Xevudy drug generated sales of £1.3bn between them.
Industrial software company Aveva slumped 13% as the company said a revenue hit from sanctions on Russia would hit its operating profit this year.
Bank of Ireland shares fell as chief executive Francesca McDonagh stepped down after 4½ years in the role to join Credit Suisse. The bank announced after the close of trading on Tuesday that McDonagh would leave the bank by September for, it is understood, another job with another European financial institution.
Deutsche Bank fell after warning that the Russia-Ukraine conflict could hurt full-year results.
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