Europe open: Shares rally on bargain hunting; Atos slumps
European shares rallied on Tuesday as investors went bargain hunting after days of selling on the back of fears of more aggressive interest rate tightening.
The continent-wide Stoxx 600 index rose 0.26% in early deals after slumping more than 2.4% on Monday.
“Investors have endured a bruising start to the week as fears of recession begin to mount,” said Interactive Investor head of markets Richard Hunter.
“In an escalation of estimates of the Federal Reserve’s hawkish monetary stance, expectations for the interest rate rise due tomorrow have now been amended to a hike of 0.75% from the previous level of 0.5% which had been widely expected.”
“At the same time, there was an inversion of the yield curve between the benchmark two and 10-year Treasury bonds in the US which is seen as a harbinger of forthcoming economic contraction. The measure has tended to be a reliable warning in the past and, in the absence of any immediate positive catalysts, there is little to present an opposing view.”
Inn equity news, shares French IT company in Atos slumped more than 20% after it said chief executive Rodolphe Belmer was quitting after six months in the job following weeks of reports of deep divisions with the board over strategy.