# Banks lift European bourses as rate hike, recession fears grow Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-08-30 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: European Shares Rise on Banking Boost Amid Energy Crisis Fears Meta Description: Stay updated on European shares rising after a two-day slump, boosted by banking stocks due to higher interest rate expectations. However, fears of an energy URL: https://financedigest.com/banks-lift-european-bourses-as-rate-hike-recession-fears-growhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-08-30t072415z1lynxmpei7t079rtroptp4europe-stocks-1736815334298-compressed.jpg) By Anisha Sircar (Reuters) -European shares rose on Tuesday following a two-day slump as banking stocks boosted bourses on the back of higher interest rate expectations, though fears around a burgeoning energy crisis and looming recession kept gains in check. The pan-European STOXX 600 rose 1.0%, after a sell-off of about 2.5% over the last two sessions, driven by a hawkish tone struck by European Central Bank (ECB) speakers and U.S. Federal Reserve Chair Jerome Powell, which bumped up [rate expectations](https://www.financedigest.com/ecbs-makhlouf-expects-50-bps-rate-hike-in-december.html "ECB’s Makhlouf expects 50 bps rate hike in December"). Bank stocks, which tend to benefit from higher [interest rate](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc") environments, rose 2.2% after traders priced in more than a two-thirds chance of a 75-basis-point move at the ECB’s September 8 policy meeting. \[ECBWATCH\] A number of ECB officials spoke in favour of [rate hikes](https://www.financedigest.com/wall-street-slips-dollar-gains-as-fed-seen-hiking-rates-in-may.html "Wall Street slips, dollar gains as Fed seen hiking rates in May"), but what matters more is whether markets have confidence in the ECB to significantly tighten despite all adversities,” said Commerzbank analyst Esther Reichelt. With a view to the coming winter and the threat of an energy crisis, [investors are likely to remain](https://www.financedigest.com/6-months-to-go-until-brexit-and-investor-sentiment-remains-bold.html "6 months to go until Brexit and investor sentiment remains bold") understandably cautious,” Reichelt added. A planned three-day halt of natural gas supplies to Europe by Russian energy giant Gazprom via the [Nord Stream](https://www.financedigest.com/denmark-invites-nord-stream-operator-to-help-salvage-unidentified-object.html "Denmark invites Nord Stream operator to help salvage unidentified object") 1 pipeline was set to kick off on Wednesday. On Monday, ahead of the halt, [German economy](https://www.financedigest.com/german-economy-expected-to-skirt-recession-economy-ministry-report.html "German economy expected to skirt recession – economy ministry report") minister Robert Habeck said the country faces the “bitter reality” that Russia will not restore gas supplies to Germany. Separately, [several Italian papers reported](https://www.financedigest.com/severe-april-storms-result-in-2bn-hit-to-us-economy-according-to-aon-catastrophe-report.html "Severe April storms result in bn hit to US economy, according to Aon catastrophe report") on Tuesday Berlin was willing to consider a price-cap on gas. The DAX rose 1.6% to [move away from six-week lows](https://www.financedigest.com/planning-to-move-to-the-low-carbon-economy-how-banks-can-plan-today-for-new-stress-tests-arriving-soon-2.html "Planning to move to the low carbon economy: How Banks can plan today for new stress tests arriving soon"). Meanwhile, [Spain’s IBEX rose 1.1%](https://www.financedigest.com/spain-q2-quarterly-gdp-growth-revised-to-1-5-from-1-1.html "Spain Q2 quarterly GDP growth revised to 1.5% from 1.1%"). Spanish national [consumer prices](https://www.financedigest.com/investors-warn-big-consumer-firms-over-price-hikes-as-competitors-gain.html "Investors warn big consumer firms over price hikes as competitors gain") rose 10.4% year-on-year in August, down from 10.8% the previous month, preliminary data showed. Among individual stocks, [shares in Sanofi firmed 1.0% after a drug which the firm as well as Sweden’s SOBI are collaborating on was granted](https://www.financedigest.com/businesses-get-the-go-ahead-to-proceed-with-granting-share-options.html "Businesses get the go ahead to proceed with granting share options") priority review by the U.S. Food and Drug Administration. SOBI also added 1.0%. Gazprom has informed Engie it is reducing its gas deliveries starting Tuesday due to a disagreement between the parties, the French utility said. Engie [shares added 1.1% in early trade](https://www.financedigest.com/social-trading-is-the-new-way-that-gen-z-are-getting-their-share-of-the-pie.html "Social Trading is The New Way That Gen Z Are Getting Their Share of The Pie"). Adevinta surged 14.1% after the [world’s largest classified ads company reported upbeat](https://www.financedigest.com/world-stocks-cling-to-upbeat-mood-dollar-stalls.html "World stocks cling to upbeat mood, dollar stalls") quarterly results. Norway’s Aker Solutions jumped 5.5% after the firm announced it would form a subsea [engineering joint venture](https://www.financedigest.com/renault-geely-ink-pact-with-aramco-for-engine-venture.html "Renault, Geely ink pact with Aramco for engine venture") with Schlumberger. (Reporting by Anisha Sircar in Bengaluru; Editing by Krishna Chandra Eluri) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---