China

European Stocks Close Higher as Banks Rise on Rate Hike Prospects

Emin Sansar | Anadolu Agency | Getty Images
  • Investors continued to watch the situation in Ukraine as ongoing peace talks between Moscow and Kyiv fail to make progress.
  • On Monday, Ukraine refused to surrender the port city of Mariupol to Russian forces following an ultimatum from Moscow.
  • The prospect of more aggressive interest rate rises lifted shares of European banks on Tuesday.

LONDON — European stocks closed higher on Tuesday as investors continued to monitor the war in Ukraine and economic developments in the U.S.

The pan-European Stoxx 600 closed up 0.9%, with banks adding 2.5% to lead the gains as most sectors and major bourses finished in positive territory.

In terms of individual share price movement, German construction software company Nemetschek jumped 10% to lead the European blue chip index after posting strong full-year earnings and promising forward guidance.

At the bottom of the Stoxx 600, U.K. home improvement retailer Kingfisher slumped over 6% despite reporting record annual profits. Biotech firm Oxford Nanopore Technologies fell 4% after posting a deepening full-year net loss.

Investors continued to watch the situation in Ukraine as ongoing peace talks between Moscow and Kyiv fail to make progress. On Monday, Ukraine refused to surrender the port city of Mariupol to Russian forces following an ultimatum from Moscow.

President Volodymyr Zelenskyy told Eurovision News that ultimatums won't work as trapped Ukrainians will "fight till the end."

On Wall Street, U.S. stocks rose after Federal Reserve Chair Jerome Powell said the central bank is open to higher rate hikes to combat rising inflation.

The prospect of more aggressive interest rate rises lifted shares of European banks on Tuesday, with Deutsche Bank, Bankinter and Banco de Sabadell leading the way.

Market watchers are also monitoring the omicron subvariant as it spreads across Europe along with one of the worst Covid-19 outbreaks in China since 2020.

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— CNBC's Ryan Browne, Samantha Subin and Eustance Huang contributed to this market report.

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