(Reuters) – European stocks bounced back on Tuesday after their worst selloff this year in the previous session, helped by a handful of positive corporate earnings and production updates from miners.
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 19, 2021. REUTERS/Staff
The pan-European STOXX 600 index rose 0.8% after worries about the fast-spreading Delta variant and slowing economic growth knocked 2.3% off the index on Monday.
Miners, among the sectors that bore the brunt of the bruising selloff, rose 1.7% after BHP Group and Anglo American provided upbeat production numbers.
Swiss bank UBS climbed 4.6% after it posted a 63% jump in second-quarter net profit, helped by a booming wealth management business. Peers Credit Suisse and Julius Baer also rose.
“Although the U.S. economy is in a slowdown phase and we expect European growth to peak this summer, we continue to favour risk assets over a 12-month horizon,” analysts at BCA Research wrote in a note.
“The UK is a case in point — broad-based vaccinations are keeping hospitalisation rates there low despite the sharp jump in COVID-19 infections. Thus, the market impact of the Delta variant may ultimately prove fleeting in developed economies.”
British airline easyJet gained 1.9% after saying it plans to fly 60% of its pre-pandemic capacity in the July-September period.
Europe’s travel & leisure index has fallen sharply from its April record highs, with travel-related stocks getting hit by soaring infections across the continent and last-minute changes to travel rules.
The U.S. government on Monday issued the highest warning against travel to the United Kingdom.
Graphic: Europe’s travel % leisure index drops 17% since April peak –
Among other stocks, Norwegian telecoms operator Telenor rose 2.6% after it raised its full-year revenue outlook.
French spirits group Remy Cointreau inched down 0.2% even as its first-quarter organic sales more than doubled after bars and restaurants reopened in Europe.
Analysts expect profit at STOX 600 companies to jump 108.6% in the second quarter versus a year ago, as per Refinitiv IBES estimates, as COVID-19 restrictions eased across Europe.
Sweden’s AB Volvo fell 3.8% as it warned of further production disruptions and stoppages this year due to chip shortages.
Home appliances maker Electrolux tumbled 9.7% after it reported a lower-than-expected second-quarter operating profit and warned global supply chain woes would worsen in coming months.
(This story was refiled to add dropped word in chart)
Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Uttaresh.V
