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European shares bounce back from U.S. jobs report hammering

08/08/2022 | 05:08am EDT

* EZ investor morale edges up in Aug, recession still likely

* Carlsberg lifts 2022 outlook; stock rises

* Siemens Energy falls on warning of deeper net loss

* Moody's cuts Italy outlook to 'negative' from 'stable'

Aug 8 (Reuters) - European shares logged their best day in nearly two weeks on Monday after clocking falls in the previous week when a strong U.S. jobs report rekindled bets of another aggressive rate hike by the Federal Reserve.

The pan-European STOXX 600 index rose 0.8%, steadying after snapping two weeks of gains on Friday.

Nearly all sectors were up, with economically sensitive sectors including financial services and autos leading gains.

Focus shifts to a key inflation data from the world's biggest economy later in the week. Global stock markets were spooked on Friday after data showed a large increase in U.S. employment, denting hopes that the Fed might let up in its series of rate hikes aimed at taming surging inflation.

After ending July with gains of over 7%, the STOXX 600 has struggled this month to extend the momentum on worries over dour economic data, rising geopolitical tensions and fears that higher interest rates could tip the economy into a recession.

Investor morale in the euro zone was essentially unchanged in August from July, with a rise too little to stave off recession fears, a survey showed.

"We see recession in Europe as likely even absent big rate hikes as broad economic stress from an energy crisis bite...The European Central Bank and markets underappreciate the risk of the energy crunch causing a recession, and the ECB will eventually accept this and rethink its rate path," wrote strategists at BlackRock in a note.

The world's biggest asset manager is underweight on European equities as the energy price shock stoked by the Ukraine war puts the region at risk of stagflation, they added.

Meanwhile, European oil and healthcare stocks missed out the broader rally, up 0.6% and flat, respectively.

Crude prices held near multi-month lows on demand worries, while healthcare stocks were pressured by the U.S. Senate on Sunday passing a bill intended to lower drug prices, among other things.

Danish brewer Carlsberg rose 1.5% after lifting its profit growth outlook for 2022, saying it has been able to resume Ukraine operations and log a strong performance in Europe and Asia.

Siemens Energy fell 1.0%, blaming a 200 million euro ($204 million) charge related to winding down its Russian business for a wider net loss in 2022.

Italian stocks lagged their European peers after global ratings agency Moody's cut the country's outlook to "negative" from "stable" on Friday.

(Reporting by Shreyashi Sanyal and Anisha Sircar in Bengaluru; Editing by Sriraj Kalluvila and Shinjini Ganguli)

© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) -0.16% 0.67269 Delayed Quote.5.51%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.52% 0.64936 Delayed Quote.-10.08%
BLACKROCK, INC. -1.52% 591.39 Delayed Quote.-35.41%
BRITISH POUND / EURO (GBP/EUR) 0.43% 1.11842 Delayed Quote.-5.95%
BRITISH POUND / US DOLLAR (GBP/USD) 0.08% 1.07961 Delayed Quote.-19.80%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.29% 0.757949 Delayed Quote.9.05%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.60% 0.73133 Delayed Quote.-7.03%
CARLSBERG A/S 1.86% 927 Delayed Quote.-19.26%
EURO / US DOLLAR (EUR/USD) -0.35% 0.9651 Delayed Quote.-14.81%
INDIAN RUPEE / EURO (INR/EUR) 0.19% 0.012714 Delayed Quote.7.66%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.44% 0.012254 Delayed Quote.-8.35%
LONDON BRENT OIL -1.59% 85.46 Delayed Quote.11.32%
MOODY'S CORPORATION -0.24% 254.69 Delayed Quote.-34.79%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.41% 0.57151 Delayed Quote.-15.97%
SIEMENS AG 0.16% 98.6 Delayed Quote.-35.40%
SIEMENS ENERGY AG 1.31% 11.585 Delayed Quote.-49.09%
STOXX EUROPE 600(EUR)(TR) -0.33% 894.63 Delayed Quote.-18.14%
US DOLLAR / EURO (USD/EUR) 0.36% 1.036151 Delayed Quote.17.33%
WTI -1.61% 78.183 Delayed Quote.5.54%
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