The FTSE 100 closed 0.3% higher, the CAC rose 0.2% and the DAX tumbled 0.6%
European stocks were mixed on Monday after high energy prices and looming gas shortages pushed Germany closer to recession amid an ominous global economic outlook.
In London, the FTSE 100 closed 0.3% higher as a big week for company results kicks off. The CAC rose 0.2% in Paris and the DAX tumbled 0.6% in Frankfurt.
It comes as business confidence in Europe’s largest economy fell to its lowest level for more than two years as the Russian gas crisis and soaring prices push Germany to the edge of recession.
The German Ifo Business Climate Index fell sharply to 88.6 points this month, from 92.2 points in June as firms became gloomier about both their current situation and the outlook for the next six months.
Higher energy prices and the threat of a gas shortage are weighing on the economy, said Clemens Fuest, president of Ifo. Germany is on the cusp of a recession.
Joshua Mahony, senior market analyst at online trading platform IG, said: Economic worries and rising rates look set to bring further market jitters, while UK banking stocks push higher ahead of their latest earnings.
In Europe, the latest German Ifo survey highlighting that the country is on the brink of an energy-driven recession, he said.
While gas does flow into Germany via the Nord Stream 1 pipeline once again, it appears that the pre-maintenance 40% flow level has now dropped to just 20% in a fresh knock an already troubled German economic outlook, he said.
Across the Atlantic, Wall Street indices traded in mixed territory after weak corporate earnings reports spooked investors the week before and ahead of the latest Federal Reserve rates decision.
The tech-heavy Nasdaq fell 0.3%, while the benchmark S&P 500 added 0.2%, and the Dow Jones jumped 0.3% at London’s close.
All eyes will be on the Fed’s interest rate decision and the second quarter gross domestic product data due later this week.
Michael Hewson, chief market analyst at CMC Markets, said: This late Friday weakness appears to have sharpened concerns that it might be a forewarning of similar disappointments as we look towards the likes of Google owner Alphabet, and Facebook owner Meta Platforms who report their numbers later this week, starting with Alphabet tomorrow.
He said: There is also the not insignificant matter of the latest US central bank rate decision which is expected to see the Federal Reserve raise interest rates by another 75bps on Wednesday, following on from the 75bps in June.
