Stocks are seeing a slight recovery but the negative outlook remains

LONDON (Reuters) – European stock indexes opened higher on Tuesday, as risk appetite showed some recovery after Monday’s sharp declines, but analysts said concerns about lower growth were still weighing on markets.

Asian stocks plunged to nearly two-year lows overnight, before paring losses. Read more

The decline in stock markets so far this month has been attributed to a combination of monetary tightening by major central banks and slowing economic growth.

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Central banks in the United States, Britain and Australia last week raised interest rates and investors prepared for further tightening as policymakers battle high inflation.

Although these drivers continued on Tuesday, markets saw a slight recovery, which US stock futures suggested will continue until the Wall Street open.

At 0752 GMT, the global stock index MSCI . appeared (.MIWD00000PUS)Trading was flat, which measures stocks in 50 countries, after touching its lowest levels since late 2020 earlier in the session.

The STOXX 600 Index in Europe rose 0.8%. (.stoxx)but the gains were small compared to its 6.6% loss so far in May.

S&P 500 futures are up 0.8% while Nasdaq futures are up 1.3%.

Peter McCallum, interest rate analyst at Mizuho, ​​said the bounce was a natural correction after the previous session’s decline. He said that traders may also prepare to take advantage of any boost in sentiment coming from Wednesday’s US Consumer Price Index (CPI) data.

“If headline inflation comes out and shows that CPI on a monthly basis is heading in the right direction, that makes the Fed case more pessimistic and increases are priced in,” McCallum said.

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The dollar index was little changed, after hitting a 20-year high on Monday. Meanwhile, the Australian dollar fell to its lowest level in nearly two years, weighed by fears of slowing economic growth. Read more

China’s export growth slowed to its weakest in nearly two years, data showed, as the central bank pledged to ramp up support for the sluggish economy. Read more

Oil prices rose, rebounding after Monday’s sharp declines, which were due to a combination of the dollar’s strength, growing recession fears, and the COVID-19 shutdown in China. Read more

Given concerns that Russia could cut off the flow of gas to Europe, German officials are preparing an emergency package that could include taking control of important companies. Read more

France’s European Affairs Minister said European Union members may reach an agreement this week on the European Commission’s proposal to ban all oil imports from Russia. Read more

European government bond yields were slightly higher, with the German 10-year bond yield rising 1 basis point at 1.1%.

The yield on the US 10-year bond was 3.0499%, having fallen since reaching 3.203% on Monday – a level not seen since 2018.

Gold is also somehow going to recover from Monday’s dip, up around 0.4%.

Elsewhere, Bitcoin is up 5.5%, recovering some of its 11.6% drop on Monday, its biggest daily drop since May 2021. At around $31736, the cryptocurrency has lost more than half its value since hitting its all-time high. All in all at $69,000 in November.

(Elizabeth Hawcroft reports). Editing by Bradley Perrett

Our criteria: Thomson Reuters Trust Principles.

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