Strong rise in European sentiment helps stocks rise


The DAX chart of the German stock index is pictured on the stock exchange in Frankfurt, Germany on June 29, 2021. REUTERS / Staff

  • EU economic sentiment peaks in 21 years in June
  • German DAX dominates Adidas gains
  • German inflation slows in June, still above’s target
  • German Knorr collapses after possible purchase of Hella

June 29 (Reuters) – European stocks ended higher on Tuesday after data showed a clear improvement in economic sentiment in June, while Adidas (ADSGn.DE) raised the German index with a buyback plan of ‘actions.

The pan-European STOXX 600 (.STOXX) closed 0.3% higher at 456.37 points, after data showed eurozone economic sentiment peaked in 21 years in June as a Regular immunization program has seen several economies reopen.

Although the data did not take into account the new Delta variant of the coronavirus, the improving mood saw investors cram into the sectors most likely to benefit from a recovery.

Chemical stocks (.SX4P) rose 0.9%, while autos (.SXAP) and financials (.SXFP) were among the top performers.

“It was not until May 2000, at the height of the dotcom boom, that we saw a more positive economic sentiment than today … The reopening of economies causes a synchronized surge in both production and optimism for the coming months among industry, services and consumers, ”ING analysts wrote in a note.

German stocks (.GDAXI) were the best performers, adding 0.9%. Adidas rose 2.5% to an all-time high after the sportswear maker announced it would launch a new share buyback program worth up to € 550m ($ 654m). dollars). Read more

German inflation also slowed in June, allaying fears of increasing price pressures. But the reading remained above the central bank’s target. Read more

Optimism around a steady economic recovery has put the European benchmark on track for its fifth straight month of gains, but it has recently struggled to break above its all-time high closing on June 16 amid concerns about the Delta variant of the coronavirus.

European travel-related stocks (.SXTP) fell 0.2% after their worst session in more than a month, following reports of a potential ban on British travelers to Germany. Spain has also tightened travel rules for British tourists. Read more

“Concerns (are) growing about the loss of the race between the vaccine and the virus,” said Michael Hewson, chief market analyst at CMC Markets UK.

Among individual stocks, the French supplier of electrical parts Rexel (RXL.PA) jumped 4.3% after raising its sales forecast for 2021.

Knorr Bremse (KBX.DE) fell more than 12% to the bottom of the STOXX 600, after Reuters reported that German brake maker, as well as French automotive plastics suppliers Plastic Omnium (PLOF.PA) and Faurecia ( EPED.PA) were interested in buying the German automotive lighting group Hella (HLE.DE).

Hella jumped almost 4% on the news.

Reporting by Sagarika Jaisinghani and Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta and Alexander Smith

Our standards: Thomson Reuters Trust Principles.


Leave A Reply