European stocks rose Tuesday but gains were capped by Europe’s worsening energy crisis, economic slowdown fears and central bank efforts to contain surging inflation.

Frankfurt, London and Paris equities carved out gains nearing the half-way stage, despite poor German data and after tumultuous trading the previous day as Russia curbed gas supplies to Europe.

The euro climbed a day after hitting a 20-year low versus the dollar, while sterling was lifted by reports that new UK Prime Minister Liz Truss could freeze a looming surge in energy bills.

World oil prices slid on demand concerns, one day after jumping as OPEC and allies trimmed production in an attempt to lift the market.

– ‘Wait-and-see mood’ –

“Investors remain cautious amid worries about the slowing global economy,” noted Hargreaves Lansdowne analyst Susannah Streeter.

“There is a wait-and-see mood hanging over markets.”

Frankfurt rebounded somewhat despite news that Germany’s industrial orders slumped for the sixth consecutive month in July.

That again raised the spectre that recession was looming in Europe’s biggest economy.

The European Central Bank was Thursday expected to hike interest rates to tackle surging eurozone inflation.

Eurozone stocks had tumbled Monday on heightened energy concerns after Russia said it would not restart gas flows to Germany and effectively most of the continent.

Russia’s decision — in retaliation for sanctions over Ukraine — sent shock waves through trading floors as it ramped up expectations of a painful recession in major economies.

In Asia on Tuesday, Shanghai advanced after China unveiled fresh economy-boosting measures, but the overall picture was mixed.

Sydney dipped after the Reserve Bank of Australia lifted interest rates to a near eight-year high and warned of more pain ahead.

Wall Street reopens Tuesday following a long US holiday weekend.


© Agence France-Presse