European stocks climb as markets try to bounce back from losses

LONDON — European stocks moved higher on Wednesday as global markets tried to bounce back from a widespread retreat in the previous trading session.

The pan-European Stoxx 600 added 0.6% in early trade, with basic resources climbing 1.7% to lead gains as most sectors and major bourses entered positive territory.

The higher trade for European stocks comes after regional markets retreated Tuesday, tracking negative global sentiment as U.S. markets struggled to maintain a comeback rally following weeks of losses.

There was some positive data on Tuesday with a flash purchasing managers’ index (PMI) reading for the euro zone in May coming in at 55.8, slightly ahead of estimates, as business growth across the continent slowed but remained resilient. Still, global concerns about inflation and growth are prevalent and continue to weigh on sentiment.

Overnight, shares in Asia-Pacific nudged higher in Wednesday trade, with New Zealand’s central bank announcing yet another rate hike. Meanwhile, U.S. stock futures rose on Wednesday morning after the Nasdaq Composite dropped during the regular session, following a warning of slowing growth from social media company Snap that hurt the tech-heavy index.

The World Economic Forum continues in Davos on Wednesday with the event bringing together political and business leaders from around the world. This year’s summit comes after several years of Covid-19 pandemic and amid Russia’s invasion of Ukraine, which is at the top of the agenda.

CNBC will speak to a wide range of leaders today, including the CEOs of RWE and Rabobank, Dutch Prime Minister Mark Rutte and Spain’s Deputy PM Teresa Ribera, among many others.

On the data front, German GDP grew 0.2% in the first quarter of 2022, the Federal Statistics Office said on Wednesday, as Europe’s largest economy narrowly avoided a recession on the back of strong construction and machinery investments.

In terms of individual share price movement in Europe, British radiation therapy equipment company Elekta jumped more than 6% in earl trade after beating fourth-quarter profit estimates.

At the bottom of the European blue chip index, French catering company Sodexo fell 4% after ruling out the opening up of its benefits business to an external investor.