Economic news

European Shares Slip as Auto Stocks Offset Oil Boost

* Auto stocks slide 1%

* German industrial orders fall in May

* BP, Shell gain as OPEC talks called off

* Alstom falls on downbeat outlook (Adds comment, updates prices)

July 6 (Reuters) - European stocks slipped on Tuesday after three sessions of gains as gloomy trading in Asia and an unexpected drop in German industrial orders offset a jump in commodity stocks.

The pan-European STOXX 600 index fell 0.1%, with the automobiles and parts index sliding the most. Worries about supply chain bottlenecks have weighed on the index since it hit 2015 highs in early June.

Data showed orders for German-made goods posted their sharpest slump in May since the first lockdown in 2020, hurt by weaker demand from countries outside the euro zone.

German investor morale data for July and euro zone retail sales numbers for May are due later in the day.

The oil and gas sector rose 0.5% as crude prices hit their highest levels since 2018 after OPEC discussions were called off, heightening expectations that supplies will tighten further.

UK-listed oil majors BP and Royal Dutch Shell gained almost 1% each. Miners gained 0.3% on the back of rising metal prices.

“The impact of higher oil prices is largely a transitory one and both sides will likely find some agreements in a few short weeks,” Sebastien Galy, senior macro strategist at Nordea Asset Management said.

“What matters more is the speed with which the Fed shifts from risk management to a mild tightening stance starting most likely with mortgages.”

Investor focus will be on the release of U.S. Federal Reserve’s minutes of its latest policy meeting on Wednesday as they look for hints on whether the central bank will roll back its large stimulus programme.

A strong rebound in euro zone’s business activity and optimism about a full reopening of Britain’s economy later this month have boosted the continent’s markets so far in July, with the STOXX 600 entering its sixth month of gains.

French train maker Alstom fell 5.7% to the bottom of STOXX 600 after it forecast negative free cash flow for its fiscal year.

British online grocer and technology group Ocado rose 2.1% after it posted a 20% rise in retail revenue in the first half of the year and said it had signed a new deal to develop supermarket chain Alcampo’s online business in Spain.

UK supermarket group Sainsbury’s inched up 0.4% after it beat expectations for first-quarter sales.

Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta

Source: Reuters


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