European Stocks Close Broadly Higher on Monday

Last Updated: Monday, May 16, 2022 1:02 PM | MT Newswires

European stock markets closed broadly higher on Monday, continuing Friday's momentum, as the European Commission provided clarity on Russian gas payments and assured of continued GDP growth despite a downgrade in projections.

The Stoxx Europe 600 was up 0.4%, London's FTSE 100 was up 0.63%, and the Swiss Market Index was up 0.19%. On the other hand, France's CAC was down 0.23%, and Germany's DAX lost 0.45%.

After reporting that the euro area's trade deficit in March more than doubled to 16.4 billion euros ($17.1 billion), the European Commission released its less-than-rosy Spring 2022 Economic Forecast. It, however, said post-lockdown reopenings and policies will help keep EU GDP in the positive territory over the forecast horizon.

The commission lowered its 2022 real GDP growth forecast for the EU to 2.7% from the 4.0% provided during the Winter 2022 interim forecast in February. It was mainly attributed to the effects of Russia's invasion of Ukraine.

Meanwhile, ending weeks of speculation, the commission provided clarity to member states May 13, saying that companies may open an account with Gazprom's (GAZP.ME) Gazprombank to pay for gas deliveries and not be in violation of sanctions, as long as they pay in euros or US dollars, depending on original contract terms. The Russian company will then convert it to rubles to comply with a new mandate.

Confirming that it has open a bank account, Germany's largest power producer, RWE (RWE.F), gained 3%. On the flip side, French drugmaker Valneva (VLA.PA) shares were down 19% at close of trade as it stands to lose its COVID-19 vaccine deal with the bloc.

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