Since the beginning of the trading session on Wednesday, Europe's main stock indices have been increasing after a noticeable decline a day earlier.

At the time of writing the article, the CAC 40 advanced by 0.28%, the DAX gained 0.34%, and the FTSE 100 grew by 0.43%.

The main reason for the corrective reversal of the stock market today was positive macro stats for the eurozone. In the first quarter of this year, Germany's gross domestic product jumped by 4% in annual terms. Notably, Germany has the largest economy in the euro area.

Investors also took notice of the report on Germany's consumer confidence index, which rose to -26 from the revised May figure of -26.6.

During this week, traders will follow the results of the World Economic Forum in Davos. Policymakers and politicians are going to discuss the prospects for global economic growth. In addition, the Fed will unveil its meeting minutes for May on Wednesday. Speculators are expecting to find hints about further steps on monetary policy tightening.

Results of yesterday's trading

At the close of the trading session on Tuesday, the main European indices slid into the bearish territory, following a decline in stockindices of the Asia-Pacific region and the US. Stock markets worldwide sagged yesterday because of the mounting concerns about the prospects for global economic expansion amid rising inflation and aggressive tightening by the Fed. Investors also remain alert due to geopolitical tensions in eastern Europe, as well as the coronavirus outbreak in China.

As a result, the STOXX Europe 600 composite index, Europe's leading blue-chip index, fell by 1.14% to 431.58. Last week, it lost 0.6%.

The main outsiders included in the STOXX Europe 600 index yesterday were the shares of the German company providing services in the real estate sector, TAG Immobilien (14.4%). Its stock decreased dramatically after the publication of a weak earnings report that missed market expectations.

Apart from TAG Immobilien, the shares of UK advertising company WPP dipped by 9.3%. Online retailer Zalando stock shed 9.2% and food delivery service HelloFresh shares slid by 9.1%, logging the largest losses.

At the same time, the biggest gainer in the STOXX Europe 600 index was Danish hearing aid manufacturer GN Store Nord. Its shares soared by 11.2% yesterday.

The FTSE 100 index lost 0.39%, falling to 7,484.35. The CAC 40 sank by 1.66% to 6,253.14, and the DAX decreased by 1.8% to 13,919.75.

The shares of Safran S.A. dropped by 4.2% yesterday.

Air France-KLM stock plunged by more than 20% following the news that the company plans to sell about €2.26 billion of new shares to shore up its balance sheet.

The market cap of Drax Group PLC fell by 14% as Citi analysts downgraded the company's shares to "sell" from "neutral".

The shares of Siemens Energy climbed by 2.6%. The main catalyst for the rise was the announcement about the upcoming restructuring.

Main reasons for bearish sentiment

Stock markets were gripped by pessimistic sentiment yesterday after Snap warned of lower-than-expected revenue and core profit in the second quarter due to deteriorating macroeconomic conditions. As a result, on Tuesday, its shares plunged by 41%, dragging down stocks of other IT giants.

European investors analyzed economic reports for the euro area. The Flash Eurozone Composite PMI fell to 54.9 in May of 2022 from 55.8 in April. Analysts had predicted a drop in the indicator to only 55.3.

In May, the manufacturing climate indicator in France dropped to 106, the lowest level in the last fourteen months. In April, the reading was 108. The index was projected to decline only to 107.