European stocks steadied after dropping the most since March last week, with investors bracing for the earnings season and ahead of US inflation figures that are likely to show prices are cooling.
The Stoxx Europe 600 closed slightly higher, erasing earlier losses, with gains for travel and leisure companies, while utilities and property firms lagged behind.
Ryanair shares rose almost 1%, leaving the shares up 37% from the start of the year.
Among other individual shares, Bayer rose after a report that chief executive Bill Anderson was working on a potential spinoff of the company’s agricultural chemicals business via a stock exchange listing.
European equities have had a weak start to the second half as concerns about higher rates and slowing growth linger, with the chief economist of the Organisation for Economic Cooperation and Development saying the European Central Bank faces a tough job deciding when to stop hiking.
Traders are now looking to the earnings season to assess how companies have managed through headwinds such as higher interest rates and slowing Chinese demand. Inflation data from the US due on Wednesday will also be significant for markets.
“Markets will be able to bounce a little this week. So expect some stabilisation possibly driven by decent inflation data from the US,” said Joachim Klement, head of strategy at Liberum Capital.
“But as the earnings season heats up, we expect companies to provide a rather poor outlook for the second half, which should provide continued pressure on share prices in the near term” before eventually recovering.
• Bloomberg and Irish Examiner
