(Bloomberg) -- European equity futures jumped on Wednesday, setting up regional stocks for a recovery after the benchmark Stoxx 600 Index slumped to its lowest since January 2021 on fears of a recession.

Euro Stoxx 50 futures were up 1.2% by 6:59 a.m. in London after earlier rising as much as 2.3%, also catching up with a strong session for the Nasdaq 100 in New York overnight. FTSE 100 futures gained 1% as the pound held declines following the resignation of two of the most senior members of Boris Johnson’s government.

European stocks have slumped this year as investors worried the combination of runaway inflation and hawkish central banks would bring on an economic recession. With analysts remaining bullish about corporate profits this year, the focus is turning to the second-quarter earnings season for signs of how margins are weathering higher costs and weaker consumer sentiment.

“We’re looking at an era where high inflation is going to stay and we might have to increase the floor we were expecting,” said Faisal Hasan, chief investment officer at Al Mal Capital. “But the central banks will do all it takes to contain inflation,” he said on Bloomberg TV.

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