Europe close: Stocks mostly higher, Spanish issues hit by tax on windfall profits
Stocks in Europe finished on a mixed note but for the most managed to reverse early losses, despite continued market chatter around new Covid-19 cases in China and the release of a weaker-than-expected survey on economic confidence in Germany.
"European sentiment continues to deteriorate as pandemic restrictions in China provide yet another headwind for businesses that are struggling with rising costs and deteriorating demand," said IG chief market analyst Chris Beauchamp.
"However, while today has highlighted the declining consumer and investor mindset, this week marks the beginning of a period which focuses on the outlook from US businesses.
"Rising interest rates have done little to lift bank valuations of late, and the expected downbeat outlook in the face of recession risks should keep that cap on the likes of [US lenders] JP Morgan and Morgan Stanley when they report on Thursday."
By the end of trading, the pan-European Stoxx 600 was 0.49% higher at 417.04, alongside a 0.57% rise on the German Dax to 12,905.48.
But Spain's Ibex 35 fell 0.62% to 8,014.8 led by declines for lenders Caixa Bank (-8.63%) and Banco Sabadell (-7.44%) while oil major Repsol dropped 5.73%.
On Wednesday, Spain's government announced a two-year windfall tax on oil firms' and lenders' profits aimed at raising €7.0bn in revenues.
Euro/dollar also reversed course during the session, adding 0.17% to 1.0057, having earlier slipped to 1.0000. Longer-term euro area government bond yields meanwhile extended their recent drift lower.
At last count, the yield on Spain's benchmark 10-year government bond was 12 basis points lower to 2.205%.
In parallel, front-dated Brent was down by 7.44% to $99.66 a barrel on the ICE.
The ZEW Institute's closely-followed gauge of economists' and analysts' expectations for the German economy fell to a reading of -53.8 in July, from a reading of -28.0 in June (consensus: -41.0).
As one might reasonably have expected, experts cited risks to energy supplies, upcoming ECB rate hikes and the potential impact of Covid-19 restrictions in China as their major concerns.