European Stocks Rise as U.S. Gains Mitigate Economic Weakness

European stock markets saw modest gains on Thursday, buoyed by a positive performance from U.S. markets that helped offset growing concerns about economic weakness in the eurozone.

As of 04:05 ET (08:05 GMT), Germany’s index was up 0.2%, France’s index increased by 0.2%, and the U.K. index rose by 0.1%.

### Disappointing European Economic Outlook

Recent data indicated that exports from a leading European economy fell by 1.2% in August, exceeding expectations, as declining global demand impacted export levels. This marks the second consecutive month of export declines, following a revised 1.9% drop in July. Additionally, industrial production saw declines in August, further contributing to concerns about the eurozone’s economic performance. Consumer demand appears to be weakening, with inflation remaining high, as evidenced by a 1.2% drop in eurozone production activity for August, which was more significant than anticipated.

Moreover, final data suggested that the eurozone economy likely contracted in the previous quarter, raising the possibility of a recession in the latter half of the year, as both service and manufacturing sectors reported decreased output.

### Positive Handover from Wall Street

Despite these economic challenges, European markets experienced an uptick, buoyed by a favorable sentiment coming from Wall Street, where major U.S. stock indexes recorded robust gains on Wednesday. The tech-heavy index was a notable performer, supported by data showing a lower-than-expected increase in inflation for September. This eased concerns regarding rising interest rates and the Federal Reserve’s plans to maintain elevated rates for an extended period, which in turn positively impacted Asian market performances and is expected to carry over into Europe.

### Corporate News: Imperial Brands

In the corporate sector, shares of Imperial Brands rose by 1.6% after the tobacco company reaffirmed its full-year forecast, backed by sustained demand, price increases, and strong market adoption of alternatives like e-cigarettes. The company also announced a substantial share buyback program worth £1.1 billion.

### Oil Market Rebounds

Oil prices showed signs of recovery on Thursday after the previous day’s significant downturn. However, uncertainty regarding demand, exacerbated by a notable increase in U.S. gasoline inventories, may limit further price gains. Oil prices had dropped over $5 per barrel on Wednesday, marking the largest one-day fall in over a year, following a report of the largest weekly increase in U.S. gasoline stockpiles in almost two years, indicating a notable decline in demand as the summer season comes to a close.

OPEC+ confirmed that both Saudi Arabia and Russia would continue their output cuts of at least 1.3 million barrels per day through the end of the year. By 04:05 ET, futures for crude oil were trading 0.1% higher at $84.25 per barrel, while other relevant contracts also showed slight increases. Precious metal prices, including gold, were experiencing minor gains as well.