Europe midday: Shares hold gains as eurozone avoids recession
European share markets held gains on Tuesday as flash eurozone fourth-quarter gross domestic product data showed the single-currency bloc avoided a technical recession.
The pan-regional Stoxx 600 rose 0.19% to 485 in early deals, with all major bourses higher. Spain's IBEX outperformed with a 1.27% rise after its economy recorded fourth-quarter GDP growth of 0.6%.
The eurozone and European Union managed to avoid a technical recession after official flash estimates showed the economy flatlined in the last three months of 2023.
The reading of zero GDP growth compares with a 0.1% contraction in the third quarter, EU statistics agency Eurostat said on Tuesday.
A technical recession is measured by two negative quarters in a row.
Germany’s economy contracted in the final quarter of 2023 last year, official data revealed on Tuesday, meaning Europe’s largest economy is close to recession. GDP shrank by 0.3% in the final three months of the year 2023, in line with forecasts, statistics agency Destatis said, following flat GDP in the second and third quarters of last year. The third-quarter was revised up from a 0.1% fall.
France avoided technical recession at the end of 2023, but its economy stagnated in the second half. The CAC-40 index still managed an 0.11% gain.
Oil prices stayed above $82 a barrel after state-run Saudi Aramco dropped a plan to increase daily production capacity at the request of the energy ministry.
In a major policy u-turn, the world's largest oil company producer ditched plan's to boost maximum sustainable production capacity from to 13 million barrels a day from 12 million by 2027.
"Is the Kingdom growing more cautious on the outlook for oil demand, or is it simply trying to boost its coffers in the short term by squeezing the market? At the moment, it isn’t clear which factor is driving the decision, but it is clear that the markets supply/demand balance will be tighter going forward as a result," said Steve Clayton, head of equity funds at Hargreaves Lansdown.
In equity news, WPP gained as it aimed to achieve revenue growth of at least 3%, a 16% to 17% operating profit margin, and at least 85% adjusted operating cash flow conversion. WPP said it was planning to invest around £250m annually in proprietary technology to support its artificial intelligence and data strategy.
Deliveroo slumped after Delivery Hero sold its entire 4.5% stake in the company in a placing. Delivery Hero was also down on the news.
Reporting by Frank Prenesti Sharecast.com