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Investors were waiting for Powell's comments on the US economy, inflation, and the central bank's policy stance. Powell's testimony is expected to provide more clarity on the Fed's timeline for tapering its massive asset purchase program and raising interest rates. This information could impact global markets, including European stocks.
In terms of sectoral performance, technology stocks were the top gainers, with the STOXX 600 technology index rising 0.8%. The sector was driven by gains in semiconductor manufacturers such as ASML, Infineon, and STMicroelectronics, which all rose more than 1%.
Meanwhile, the banking sector was among the biggest losers, with the STOXX 600 banking index falling 0.7%. This was largely due to lower bond yields, which could impact banks' profitability. Lower yields also weighed on insurance stocks, with the STOXX 600 insurance index falling 0.5%.
In individual stock news, shares of UK-based food delivery platform Deliveroo fell 4.4% after the company reported widening losses. The company said that it expects demand for its services to slow as pandemic-related restrictions are lifted. On the other hand, German online fashion retailer Zalando gained 1.5% after reporting strong revenue growth in the second quarter of the year.
The article also notes that European markets are facing headwinds from concerns over the Delta variant of COVID-19, which could impact economic growth and corporate earnings. The World Health Organization has warned that the Delta variant is spreading rapidly across Europe, with some countries seeing a surge in cases. This has led to renewed restrictions in some regions, which could weigh on consumer spending and business activity.
In addition, the article highlights the ongoing tension between the US and China, which could also impact European markets. The US has imposed sanctions on Chinese companies over alleged human rights abuses, while China has responded by threatening retaliation. These tensions could impact global trade and economic growth, which would in turn impact European markets.
In summary, the European stock market saw modest gains on Tuesday, driven by investor optimism ahead of Powell's testimony before Congress. Technology stocks were the top gainers, while the banking and insurance sectors were among the biggest losers. However, concerns over the Delta variant of COVID-19 and ongoing US-China tensions could impact European markets going forward.