Banks lift European bourses as rate hike, recession fears grow

European shares inched higher on Tuesday following a two-day selloff as banking shares boosted stocks, though fears around a burgeoning energy crisis, interest rate hikes and a looming recession kept gains in check.

The pan-European STOXX 600 rose 0.4%, after shedding about 2.5% over the last two sessions, on the back of a hawkish tone struck by European Central Bank speakers and U.S. Federal Reserve Chair Jerome Powell, which bumped up rate expectations.

Spain’s IBEX rose 0.7%. Spanish national consumer prices rose 10.4% year-on-year in August, down from 10.8% the previous month, preliminary data showed.

Miners slipped 1.2%, tracking weaker metals prices as rising COVID-19 cases in China and looming rate hikes renewed demand concerns in key commodities. [MET/L]

Adevinta surged 15%, topping the STOXX 600 after the world’s largest classified ads company reported quarterly results with core markets revenues up 10% year-on-year.

Investor focus was on euro zone economic sentiment and German inflation data due later in the day.