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European stocks eke out small gains as global growth fears return

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European stocks made small gains on Tuesday as investors turned away from the political fallout of the armed uprising in Russia and renewed their concerns over the outlook for the global economy.

Europe’s region-wide Stoxx 600 gave up most of its early gains to trade flat. France’s Cac 40 and London’s FTSE 100 were up 0.2 per cent.

Investors awaited the start of a European Central Bank conference in Portugal, where the introductory speech by President Christine Lagarde will be scrutinised for any indication of future monetary policy in the eurozone.

Economists said the ECB would be swayed by inflation figures due on Friday. Price growth is expected to come in at 5.7 per cent in the year to June, compared with 6.1 per cent a month earlier.

Yet rate-setters are likely to remain concerned over the region’s underlying price pressures. Core inflation, which strips out volatile food and energy prices, is expected to have accelerated this month, necessitating further ECB tightening.

Wall Street futures rose, with contracts tracking the benchmark S&P 500 index adding 0.3 per cent while those tracking the tech-heavy Nasdaq 100 gained 0.4 per cent ahead of the New York open.

Oil prices steadied after the weekend’s armed mutiny in Russia raised serious questions about the outlook for Putin’s regime and doubts over crude output from one of the world’s top suppliers.

International benchmark Brent crude traded 0.4 per cent higher at $74.53 a barrel while the US marker, West Texas Intermediate, rose 0.5 per cent to $69.73.

In China, equity markets were up, with Hong Kong’s Hang Seng index rising 1.9 per cent and China’s CSI 300 gaining 0.9 per cent.

Investors welcomed the assurance that China’s officials intended to support growth in the world’s second-largest economy, which has struggled to pick up steam this year since reopening after the pandemic.

China’s premier Li Qiang gave a speech at the World Economic Forum’s Annual Meeting of the New Champions, known as the “Summer Davos”, relaying Beijing’s intentions to enact more effective policies to bolster domestic demand.

Policymakers this month cut benchmark interest rates in an attempt to stimulate growth, but economists anticipate a range of further support measures over coming months.

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