European shares tick higher on bank, auto boost

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June 1 (Reuters) – European shares opened modestly higher on Wednesday, led by gains in banking and auto stocks, but sentiment was kept in check as a clutch of bleak data stoked fears of slowing growth.

Starting June on a positive note, the pan-European STOXX 600 index .STOXX rose 0.3% by 0716 GMT after closing down 0.7% on Tuesday, as record high inflation had stoked worries about aggressive central bank action. It lost 1.6% in May.

Deutsche Bank economists now expect the European Central Bank to raise interest rates by 50 basis points in September as rising prices squeeze economic growth. nL8N2XO10Y

Data showed German retail sales fell by more than expected in April as consumers feel the pinch of higher prices, while another survey showed British companies expect barely any growth over the next three months. nL8N2XN44R

Auto stocks .SXAP rose almost 1%, while banks .SX7P were the biggest boost to the STOXX 600, up 0.6%.

Among individual stocks, British footwear brand Dr. Martens DOCS.L surged 19.0% after it forecast higher annual revenue growth, thanks to price hikes made in response to soaring inflation and stronger sales of its shoes and boots. nL4N2XO0RN

Deutsche Bank’s asset manager DWS DWSG.DE slumped 6.9% after its chief executive officer said he would step down next week, as the company faced allegations of misleading investors about “green” investments. nL1N2XO08O

(Reporting by Susan Mathew in Bengaluru; Editing by Rashmi Aich)

((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))