On Wednesday, European shares ended the day on gains, thanks to a rise in defensive stocks, even though the gains were kept in check by a gloomy growth outlook and a looming gas crisis.

Index rises

There was a 0.2% rise in the continent-wide STOXX 600 index, as it finally ended a losing streak of three days, but was still close to the lows of a month.

Gains were led by defensive sectors, such as healthcare, while there was a 1.8% drop in miners, which was the highest across all sectors in Europe.

Markets were assessing risks from bleak economic data, increasing interest rates, a potential recession, and high-interest rates.

Market analysts said that the persistent rise in gas prices in Europe and the possibility of them remaining high makes a deep recession highly likely for the euro zone economy.

Furthermore, the benchmark gas prices in Europe have almost tripled in a period of almost two months, as the possibility of unreliable gas supplies from Russia looms ahead of the winter season.

Analysts said that the strong rally in global equities led by US had also given Europe a boost, but the outlook for the continent remains very bleak.

They said that the markets were reassessing the rally, focusing on the economic symposium scheduled at Jackson Hole this week.

Expectations

Investors have become cautious ahead of the speech of the Fed chair at the symposium, after Minneapolis Fed President, Neel Kashkari said on Tuesday that controlling inflation was a priority.

Market analysts said that inflation expectations for Europe were rising once more, while growth expectations were getting worse, which means the fundamentals for equities are becoming more challenging.

There was a rise in German government bond yields to a high of 8 weeks, as worries about inflation strengthened expectations of an aggressive monetary policy tightening path.

The markets were also focusing on the minutes of the meeting of the European Central Bank last month, which are due for release on Thursday, and are likely going to be hawkish.

Other stocks

As far as stocks are concerned, there was a 3.6% rise recorded in Richemont, after the company said that a 47.5% stake would be acquired by Farfetch in the loss-making online fashion retailer.

YOOX Net-A-Porter has been making a loss for the luxury goods group and a 3.2% stake would also be taken up by Alabbar.

A 4.6% gain was also recorded in Bavarian Nordic after the Danish biotech company stated that it was doing everything to fulfilling the high demand for the monkeypox vaccine all over the globe.

The company also left its business outlook unchanged for the year. Meanwhile, the euro continued to struggle to go back above parity.

Even though it had made slight gains a day earlier, it was down again on Wednesday, and pressure is expected to remain high on the common currency, considering the bleak economic outlook for the euro zone.