Shreyashi and Sruthi Sankar

(Reuters) -European stock markets recorded gains on Wednesday for the second consecutive session. Strong earnings and a rise in economically sensitive sector helped boost sentiment following a sharp slowdown in U.S. inflation growth in April.

The continental index gained 1.7% on the day, its highest percentage gain in a single day since late March. Miners , automakers and oil & gas gained more than 3% each.

Investor sentiment was buoyant by a few positive earnings reports and the merger activity.

Swedish Match surged 9.0% upon Philip Morris International Inc (NYSE) announcing that they were making a cash recommendation for Swedish Tobacco Company of approximately 161.2 Billion Swedish Crowns ($16B).

Thyssenkrupp, a German conglomerate (ETR:), surged 11.2% following an increase in its outlook for revenue and operating profit through 2022. British caterer Compass Group The LON Index climbed 7.4% upon the increase in its revenue forecast.

This recovery came after a selloff in equity markets globally this month, triggered by concerns about China’s aggressive monetary tightening. The STOXX 600 fell to its lowest level in two months on Monday.

So far, the index is at a 5% decline.

There are concerns about inflation, and whether it leads to recession. When you add that to the situation in China regarding lockdowns it creates a mix of worries,” stated Chi Chan, a Federated Hermes portfolio manager (NYSE:).

Christine Lagarde, President of the European Central Bank, stated Wednesday that it is possible for the European Central Bank to terminate its stimulus program by buying bonds in early third-quarter this year. Then, a rate increase could be just a few weeks later.

The data showed that U.S. consumer inflation slowed in April, as record gasoline prices fell. It is likely that inflation has reached its peak. However, it’s likely that the Federal Reserve will continue to hike interest rates.

Equiti Capital’s market analyst David Madden stated that traders have focused their attention upon the fact that headline and core reports both fell on the month. This removed much fear over large rate hikes.

French manufacturer of trains Alstom The EPA fell to 5.2% following comments from the Market Division on Cash flow Generation and Guidance. [nL5N2X3130]

Bayer (OTC 🙂 plunged 6.2% following the Biden administration’s request that the U.S. Supreme Court deny the German agricultural and pharmaceutical giant’s attempt to dismiss cancer claims brought by Roundup-affected customers.