European Markets Recover Ground Following Yesterday's Sell-Off

(RTTNews) - The majority of the European markets ended Tuesday's session with small gains, following yesterday's weak performance. Investors stepped in to buy technology stocks following Monday's drop.

The political uncertainty in the UK remains a concern among investors. Traders are also looking forward to tomorrow's announcement from the Federal Reserve, which will occur after the European close on Wednesday. The Fed is widely expected to raise interest rates by a quarter point. Investors will pay particular attention to the accompanying statement, for any clues regarding future rate hikes.

The Spanish economy is set to sustain its robust growth momentum this year underpinned by domestic demand and exports, but is likely to slow in the next two years partly due to policy tightening, the Bank of Spain said Tuesday as it raised the growth forecasts.

Growth projections for this year and next were raised by 0.3 percentage points each from March to 3.1 percent and 2.5 percent, respectively, the semi-annual economic outlook report of the bank showed. In 2016, the economy grew 3.2 percent.

The forecast for 2019 was left unchanged at 2.2 percent.

Finland's economic growth is set to improve sharply this year as exports are expected to firm up on the back of the recovery in the global economy, the Bank of Finland said Tuesday as it raised its economic growth forecasts.

The growth forecast for this year was increased to 2.1 percent from 1.6 percent seen in March. The economy expanded 1.6 percent in 2016.

The pace is expected to slow next year to 1.7 percent, which was revised up from 1.5 percent. The outlook for 2019 was raised to 1.4 percent from 1.3 percent.

The pan-European Stoxx Europe 600 index advanced 0.53 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.39 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.29 percent.

The DAX of Germany climbed 0.59 percent and the CAC 40 of France rose 0.40 percent. The FTSE 100 of the U.K. declined 0.15 percent, but the SMI of Switzerland finished higher by 0.67 percent.

In Frankfurt, Deutsche Bank gained 0.55 percent after it agreed to pay $170 million to settle an investor lawsuit accusing it of conspiring with other banks to manipulate the benchmark European Interbank Offered Rate and related derivatives.

BASF rose 0.24 percent while Syngenta slid 0.16 percent in Zurich on a Bloomberg report that they have submitted preliminary bids for assets that Bayer plans to sell in order to get regulatory approval for its $66 billion takeover of seeds giant Monsanto. Bayer advanced 1.22 percent.

Lufthansa climbed 3.0 percent after Credit Suisse upgraded its rating on the stock to "Neutral" from "Underperform."

In London, Royal Bank of Scotland increased 0.84 percent on reports that the lender is in advance negotiations to reach a settlement with a U.S. regulator over the mis-selling of toxic mortgage bonds.

Ashtead shares dropped 2.50 percent. The industrial equipment hire group reported a 7 percent rise in full year profit as a result of a weaker pound and strong growth in its core North American unit.

Troubled outsourcing firm Capita soared 15.17 percent after saying it expects profitability to improve in the second half.

Merlin Entertainments dropped 2.68 percent after the theme park owner warned of slower growth following recent attacks in Manchester and London.

UniCredit, UBI Banca and Banco BPM climbed in Milan after Italy's finance minister Pier Carlo Padoan said "a solution is now close " for rescuing two struggling banks in the north east Veneto region.

Luxottica advanced 3.13 percent after Morgan Stanley upgraded its rating on the stock to "Overweight" from "Equal-weight."

German economic confidence weakened unexpectedly to a 3-month low in June, but financial market experts' assessment about the current situation improved notably, a closely watched survey showed Tuesday.

The ZEW Indicator of Economic Sentiment dropped to 18.6 in June from 20.6 in May, according to survey data from the Mannheim-based Centre for European Economic Research/ZEW. The indicator remained below the long-term average of 23.9 points and economists' forecast of 21.7.

German wholesale price inflation eased to the lowest in five months in May, data published by Destatis showed Tuesday. Wholesale prices climbed 3.1 percent year-on-year in May, slower than the 4.7 percent increase seen in April. This was the weakest growth since December, when the rate was 2.8 percent.

France's payroll employment grew for the eighth successive quarter in the three months ended March, and at a slightly faster pace, latest data from the statistical office INSEE showed Tuesday. In the first quarter, payroll employment climbed 0.4 percent from the fourth quarter, when it increased by 0.3 percent.

UK inflation accelerated unexpectedly to the highest level in four years as the weakness in the sterling since the 'Brexit' vote made imports expensive. Inflation rose to 2.9 percent in May from 2.7 percent in April, data from the Office for National Statistics showed Tuesday.

This was the highest since June 2013 and notably above the central bank's target of 2 percent. Economists had forecast the annual rate to remain unchanged at 2.7 percent.

British house price inflation accelerated in April to the highest level in six months, after easing in the previous month, figures from the Office for National Statistics showed Tuesday. The house price index climbed 5.6 percent year-over-year in April, faster than the 4.5 percent rise in March.

With an increase in prices for services offsetting a drop in fuel prices, the Labor Department released a report on Tuesday showing that U.S. producer prices were flat in the month of May. The Labor Department said its producer price index for final demand was unchanged in May after climbing by 0.5 percent in April. Economists had expected the index to inch up by 0.1 percent.