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European Stocks Higher; Universal Music Group Soars on Debut By


© Reuters

By Peter Nurse – European stock markets bounced Tuesday, helped by a strong debut from Universal Music Group, while the Federal Reserve’s policy meeting continues to dominate thinking.

At 4 AM ET (0800 GMT), the in Germany traded 1.3% higher, rebounding from its lowest level since late July, the in France rose 1.4% and the U.K.’s climbed 1%.

European equity prices climbed Tuesday after a slow start, the rebounding of most demand sectors, especially energy and mining stocks, which had been hard hit Monday.

After the biggest European listing this year, Universal Music Group saw its stock rise more than 35% over its reference price on its first trading day.

U.K. transport company Stagecoach (LON:) stock soared 17% after the news National Express (LON:), up 3.9%, was in talks to acquire its rival operator in an all-share deal, opening up potential cost savings and new growth opportunities.

On the flip side, Kingfisher (LON:) stock fell over 5% despite the U.K. home improvement retailer reporting a sizable jump in first-half profit and raising its sales expectations for the second half.  Company warned about Covid-related uncertainties and stated that problems in shipping containers sourcing would most likely continue into 2022.

But Tuesday’s main event will be the Fed, which begins its two day meeting. The Fed is expected to signal its intent to reduce the amount of bonds it purchases this year. But, more people are unsure if the Fed’s so-called dots plot will be adjusted to accommodate expectations for earlier rate rises.

There also remain concerns of a disorderly default in property giant China Evergrande Group (HK:) Group, potentially hurting China’s property and financial sectors at a time when growth in the world’s second-largest economy is already slowing.

Evergrande is due to make an $83.5million interest payment on its March 2022 bond on Thursday. A second payment of $47.5 million for its March 2020 notes due on Sep. 29, and there’s a grace period for 30 days. The bank creditors have already received a very small amount. 

The price of crude oil also recovered Tuesday after days of losses due to indications of continued disruptions in U.S. Gulf of Mexico crude production.

Royal Dutch Shell, the largest oil producer in the area, announced Monday that it will stop producing from its two biggest fields in this region until 2022 due to the destruction caused by Hurricane Ida late in August. Shell shares rose 3.3% Monday after the company announced that its Permian assets will be sold to ConocoPhillips for $9.5 billion. This would return $7 billion to shareholders.

Investors will now focus on crude oil supply data from the later in the session for more information.

By 4 AM ET, futures traded 1.7% higher at $71.31 a barrel, while the contract rose 1.4% to $74.92. The session ended with both contracts falling around 2%.

Additionally, fell 0.2% to $1,760.60/oz, while traded 0.1% higher at 1.1728.


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