European Shares Inch Higher In Cautious Trade

European stocks edged higher on Monday after key U.S. benchmark indexes finished July 2022 with largest gains since April 2020 on the back of better-than-expected earnings and easing concerns over the need for continued aggressive interest rate hikes by the U.S. Federal Reserve.

The upside remained capped by mixed earnings updates and the latest manufacturing surveys showed weakening factory activity in Asia and Europe.

Asian manufacturing output continued to weaken in July amid lingering supply-chain complications and a slowing global economy, a slew of surveys showed earlier in the day.

Also, factory activity across the euro zone contracted in July, adding to concerns the bloc could fall into a recession. The region’s manufacturing PMI index fell to 49.8 from 52.1 in June, S&P Global said.

German retail sales logged an annual decline of 8.8 percent in June, the biggest fall since the beginning of time series in 1994, Destatis said. Sales were expected to fall 8.0 percent after rising 1.1 percent in May.

The Eurozone unemployment rate came in unchanged at 6.6 percent in June, matching expectations.

The pan European Stoxx 600 was up 0.2 percent at 439.11 after rallying 1.3 percent on Friday.

The German DAX, France’s CAC 40 index and the U.K.’s FTSE 100 were up between 0.3 percent and 0.4 percent.

HSBC Holdings soared 6 percent after the British lender reported second-quarter earnings that beat analysts’ forecasts.

Pearson surged 6.2 percent. The publishing and education firm reaffirmed its full-year guidance after posting a 22 percent rise in first-half adjusted operating profit.

Spectris, a supplier of precision instrumentation and controls, plunged nearly 7 percent despite reporting higher revenue and adjusted operating profit for the first six months of 2022.

AstraZeneca dropped 1 percent. Innate Pharma SA announced that a planned futility interim analysis of the INTERLINK-1 Phase 3 study sponsored by AstraZeneca did not meet a pre-defined threshold for efficacy.

Heineken NV fell 1.8 percent. After posting strong first-half results, the world’s second-largest brewer has warned of strong headwinds from inflation in the next 18 months.

Swedish real estate company SBB slumped 5.6 percent after Goldman Sachs downgraded the stock to ‘sell’ from ‘neutral’.

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