European stocks closed higher Tuesday, as traders refocused on real estate and awaited the economic data which will determine next policy decisions by global central banks.
Investors snapped up shares in Swedish property companies, which have been hit by high interest rates and fears of curbing bank lending.
Stoxx Europe 600 Real Estate closed at 2,7%, its highest one-day gain in a whole month. Sweden’s Balder rose 5.8 percent, while Castellum, a Swedish company, increased 5.7 percent.
The FTSE 100 in London fell 0.1 percent and the Cac 40 in France lost 0.2 percent. The US markets were closed on Independence Day, resulting in a low trading volume.
Gains in real estate offset losses in Europe’s industrial shares, which fell after two of the largest oil producers in the world, Saudi Arabia, and Russia, announced they would reduce supply next month to try to increase prices.
Brent crude, an international benchmark, rose by 1.9 percent to $76.10 a barrel. The US mark West Texas Intermediate gained 2.1 percent to $71.21. The Dax in Germany lost 0.3% after export data revealed a 0.1% drop for the month of May. High interest rates continue to be a burden on the main trading partners. The reading was well below the analysts’ expectation of a rise of 0.3 percent.
Carsten Brzeski is global head of macro for ING. He said that trade was no longer the powerful resilient growth driver the German economy used to be. It has become a drag.
The expected slowdown in the US economy. . . “High inflation and high uncertainties will have a clear impact on German exports,” said he.
The US payroll data is due to be released on Friday. Traders are preparing for this closely-watched report in order to gauge the impact of high interest rates on the economy, 16 months after the Federal Reserve began its tightening campaign.
According to a Reuters survey of economists the US unemployment rate will have dipped to 3.6 percent in June. This is a sign that labour markets are relatively resilient in spite of high borrowing costs.
“If the number you arrive at is very close to consensus, then that’s a good sign.” . . Mohit Kumar is the chief Europe financial analyst at Jefferies.
“We may see a positive response from the stock market, as the Fed will feel that it is almost done with its rate hikes. . . He noted that the economy was still strong.
Asian stocks rose after the Reserve Bank of Australia decided to keep interest rates at 4,1% while policymakers monitored the effects of previous rate increases on the economy.
The faster than expected decline in the annual inflation rate of 6.8% in April to 5.6% in May guided policymakers.
After the announcement, Australia’s S&P/ASX 200 index rose 0.5 percent. China’s CSI 300 gained 0.2 percent and Hong Kong’s Hang Seng rose 0.6 percentage points.