European Stocks Largely Higher; U.K. Market Underperforms

European stock markets

CAC 40 is trading up 0.90% at 6468.31

European stock markets largely edged higher Friday, with the energy-heavy U.K. market underperforming, in cautious trading ahead of the release of key U.S. inflation data.

By 4:05 AM ET (0805 GMT), the DAX in Germany traded 0.4% higher, the CAC 40 in France rose 0.5%, while the U.K.’s FTSE 100 traded flat.

Equity markets in Europe are on course to post a positive week, with the DAX, CAC 40, and FTSE 100, all around 2% higher so far, as investors sought out bargains after a series of weekly losses while also taking comfort from Federal Reserve minutes suggesting the central bank could slow down its tightening if it sees signs inflation is on a downward trend.

This brings the release of the personal consumption expenditure index, due later Friday, into close focus, with the last PCE showing a hefty 6.6% jump over one year.

Still, this positive sentiment in Europe remains fragile, with European Central Bank President Christine Lagarde pointing to a tightening of monetary policy in July even as the war in Ukraine threatens to curb economic growth within the region.

In corporate news, heavily-weighted BP (NYSE:BP) stock fell 1.2% and Shell (LON:SHEL) stock dropped 0.7% after the U.K. government announced on Thursday that it will impose a 25% windfall tax on the oil and gas sector to support Britons facing a record squeeze on living standards.

On technical fronts CAC 40 RSI stood at 70.16 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : CAC 40 – BUY: 6467.90, TARGET: 6493.20, STOP LOSS: 6436.50

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