TLDR
- The STOXX 600 rose 0.5% to a two-week high, led by energy stocks
- Crude oil climbed to six-week highs after Houthi attacks on shipping routes
- Shell, BP, and TotalEnergies posted solid gains on the oil price surge
- Airbus jumped 6% after announcing a €5 billion share buyback programme
- UK inflation slowed to 2.6% in June, boosting Bank of England rate cut hopes
European stock markets pushed higher on Wednesday, driven by rising oil prices and strong corporate earnings. The pan-European STOXX 600 climbed 0.5% to its highest level in two weeks.
London’s FTSE 100 led the gains, rising over 1%. Its heavy weighting toward commodity and energy stocks made it the top performer among its regional peers.
Oil Surge Fuels Energy Giants
Crude oil climbed to six-week highs after renewed drone and missile attacks by Yemen’s Houthis on energy shipping lanes. The attacks raised fresh fears over global oil supply security.
Shell, BP, and France’s TotalEnergies all posted solid gains as traders priced in higher supply risk. Energy stocks were the clear standout across European indexes.
The geopolitical tension added a risk premium to oil prices. That directly benefited Europe’s large integrated oil producers, which make up a big part of major indexes like the FTSE 100.
Germany’s DAX rose 0.4% and France’s CAC 40 gained 0.9%. Italy’s FTSE MIB climbed 1.1%, though banking stocks there were under some pressure.
Corporate Earnings Add Support
Airbus was the big corporate story of the day. The planemaker surged over 6% after announcing a €5 billion share buyback programme and raising its full-year guidance.
Staffing firm Randstad gained nearly 8% after beating revenue expectations. It was among the top performers on the STOXX 600.
Banco Santander rose around 2% after reporting a 17% year-on-year rise in underlying net profit for the second quarter. UniCredit shares rose 1.3%, hitting 16-year highs ahead of its own earnings report.
Akzo Nobel gained close to 3% following its second-quarter results. These earnings across several sectors helped lift broader market confidence.
The UK also provided a boost. Official data showed inflation fell to 2.6% in June. That raised expectations the Bank of England could have room to cut interest rates later this year.
Tech stocks in Europe were a weak spot. Chip equipment maker ASML fell 2.1%, while SAP lost 1.2% and STMicroelectronics slipped 0.8%.
Markets are now watching Wall Street closely. Mega-cap tech companies Alphabet and Tesla are due to report earnings later in the session.
Those results are expected to influence European chip makers and industrial suppliers when trading resumes Thursday.
The ECB is also set to make an interest rate decision on Thursday, which investors will be watching closely for any shift in policy direction.
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