European stocks go up despite recession concerns

LONDON — Europe's main stock markets rose on Monday after a mixed Asian session, as traders set aside recession fears and French political uncertainty.

Bitcoin regained $20,000 after sinking to an 18-month low of $17,599 in weekend deals because risk-averse investors had shunned the world's ‘most popular’ cryptocurrency.

London equities rallied 1 per cent in midday deals on Monday, with sentiment boosted by news of a blockbuster takeover offer for publisher Euromoney.

But the eurozone was more muted. Frankfurt stocks were up 0.5 per cent and Paris gained just 0.3 per cent, while oil prices languished on stubborn demand concerns.

Markets were rocked last week by a fierce sell-off after the US Federal Reserve's (Fed) sharp interest rate hike — the biggest in nearly 30 years — and a warning of more to come as inflation soars.

"Stability often comes before recovery and markets being more composed would suggest investors are no longer panicking," said Russ Mould, investment director at broker AJ Bell.

Investors digested news that French President Emmanuel Macron and his allies faced political deadlock after losing their parliamentary majority in a stunning blow for the president and his reform plans.

Wall Street, shut on Monday for a US public holiday, had risen on Friday.

There is a sense among traders, however, that stock markets still have some way down to go before they find a bottom, with data suggesting economies are beginning to feel the pinch.

Cleveland Fed chief Loretta Mester added to the worry. She said the risk of a recession in the United States was increasing and it would take several years to bring inflation down from four-decade highs to the bank's two per cent target.

She told CBS's "Face The Nation" on Sunday that while she was not predicting a contraction, the Fed's decision not to act sooner to fight rising prices was hurting the economy.

Analysts warned there was likely to be more pain ahead for traders as the Ukraine war drags on and uncertainty continues to reign.

Oil prices slid on Monday, extending Friday's hefty losses on demand worries caused by the prospect of a world recession.

However, US Energy Secretary Jennifer Granholm said prices could continue to surge if the European Union cuts off imports of the commodity from Russia in response to the Ukraine war.