Europe close: Stocks mostly higher for the week on bargain hunting
By Alexander Bueso
Date: Friday 24 Jun 2022
(Sharecast News) - European shares jumped on Friday with investors hunting for bargains, although Italian oilfield services outfit Saipem crashed after warning that it needed to raise cash urgently.
The pan-European Stoxx 600 index rose 2.62% to 412.93, with all major bourses higher and French, Italian and Spanish stocks higher for the week.
Britain's FTSE 100 was also up despite the government losing two by-elections by huge margins, increasing the pressure on Prime Minister Boris Johnson, whose popularity is now ebbing among voters.
And Michael Hewson, chief market analyst at CMC Markets UK, that it was defensives that were attracting the most buying interest.
"This week's recovery off the lows has been helped in some part by a sharp slide in bond yields, which has offered some respite to more defensive areas of the market [...]
"Nonetheless it has become much more apparent this week that recession fears are rising, and that's helping to act as a drag on yields, as markets price in the prospect that an economic slowdown might prevent rates going up as much as originally thought."
It was also a bruising week for commodifies as the oil price fell along with metals as the risk of recession looms.
"Oil prices have undergone quite a significant correction over the last couple of weeks as traders adapt to the increased recession risks, one of the few things that could partially address the imbalance in the market," said Craig Erlam at OANDA.
"Oil prices are paring losses at the end of the week but a little more two-way price action may be on the cards. Risks remain more tilted to the upside as a result of the tightness in the market but if we continue to see recession risks rise around the world, that could change."
In equity news, Italy's Saipem plummeted 22% after the energy services group said it would have financial resources available for less than one year if its plans to raise capital did not go through.
Zalando shares bounced 7% even after it lowered its 2022 outlook, citing deteriorating macro conditions and consumer confidence.
Shares in Barclays advanced after the UK lender said it had struck a deal to acquire specialist lender Kensington Mortgage Company.
Shares in Russian gold miner Polymetal finished flat, a day after maintaining output guidance and appointing a new auditor, although at one point during the session its shares had traded sharply higher.
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