Staff of Reuters 3 minutes Read (Click LIVE/ or type LIVE/ in a news window for a Reuters live blog on U.S., UK, and European financial markets.) * Travel stocks recover after four days of losses* German markets gain as retail sales rebound* French and Italian bourses increase on upbeat PMI data (Comments are added, and prices are updated.) Reuters, 1 July – On Thursday, European stocks reached new highs as a slew of positive corporate reports helped investors forget about fears about rising inflation and the global spread of the Delta version of the novel coronavirus. After closing Wednesday with its fifth straight quarter of gains, the pan-European STOXX 600 index was up 1.0 percent, on track for its strongest session in more than a month. Following a spike in the number of COVID-19 cases in Asia and the United Kingdom, travel-related equities jumped 2.3 percent after plunging for four days in a row on fears of tighter restrictions. Airlines EasyJet, IAG, the owner of British Airways, and Ryanair all gained between 3% and 4% to the top of the STOXX 600. The benchmark index hit new highs in June as evidence of a sustained economic recovery sparked demand for economically sensitive equities such as banks and miners, but gains have slowed in the last two weeks as fears of a fast reduction of monetary stimulus arose. “Growing concerns about the second-half recovery have dampened fears of an impending monetary stimulus withdrawal,” said Deutsche Bank strategist Jim Reid. After earlier this week’s data revealed a dramatic rise in European economic confidence in June, numbers released on Thursday confirmed that the euro zone manufacturing sector expanded at its fastest rate on record last month. Following encouraging domestic industrial activity statistics, Italian and French bourses surged 1% and 1.1 percent, respectively, while Germany’s DAX jumped 1% after data showed retail sales in Europe’s largest economy returned in May. In other developments, Associated British Foods rose 4.5 percent to the top of the STOXX 600 after reporting that third-quarter sales at its Primark apparel stores reopened following COVID-19 lockdowns exceeded forecasts in all markets. Sodexo, a French catering and food services company, jumped 5% to a more than one-month high after upgrading its second-half revenue and profit margin expectations, betting on the full reopening of American schools. H&M, on the other hand, slumped 2.3 percent after reporting second-quarter earnings that were still significantly below pre-pandemic levels. Real estate and healthcare companies — so-called defensive sectors that are considered safe bets in times of economic turbulence — were among the weakest gainers in morning trading, highlighting the “risk-on” move. (Sagarika Jaisinghani in Bengaluru and Julien Ponthus in London contributed reporting; Shounak Dasgupta and Uttaresh.V edited the piece.)/n
Read More
