UPDATE 1-European stocks bounce back on earnings support; Juventus slides

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(Reuters) -European stocks rebounded on Wednesday after their worst sell-off this year as optimism about a strong earnings season countered worries about a rapid rise in COVID-19 cases in some countries.

FILE PHOTO: The German share price index (DAX) board is seen at the end of a trading day at the German stock exchange (Deutsche Boerse) in Frankfurt, Germany, February 12, 2019. REUTERS/Kai Pfaffenbach/File Photo

Tech stocks were the top gainers, up almost 1.0%, with semiconductor equipment maker ASML jumping 4.5% after it raised its full-year sales forecast, citing strong demand amid a global computer chip shortage.

Smaller rival ASM International rose 1.3% on forecasting a rise in second-quarter orders.

The pan-European STOXX 600 index rose 0.7% after a blistering seven-week rally ran into a bout of profit-taking on Tuesday, when it fell 1.9%.

Some analysts pointed to concerns over the strength of a global economic recovery after India’s mounting coronavirus crisis and a global spike in COVID-19 cases.

“While the UK and the US may be moving towards re-opening, it’s not necessarily a straight line of recovery,” said Joshua Mahony, senior market analyst at IG. “What’s been happening in Brazil and India highlights the fact the virus is a massive issue.”

There were concerns about stretched valuations, with global equities trading at all-time highs and earnings expectations surging as vaccination drives and stimulus programmes support global recovery.

European earnings are expected to have risen a record 61% in the first quarter of 2021, Refinitiv IBES data showed, placing Europe on course for a rare outperformance versus corporate America.

The world’s second-largest brewer Heineken NV gained 4% after it reported better-than-expected quarterly sales, helped by increased beer sales in Africa and Asia.

French luxury goods group Kering was up 1.2% after Gucci’s revenues rebounded strongly in the first quarter.

Oil & gas stocks got a boost despite weaker oil prices, as Deutsche Bank started coverage of stocks including Royal Dutch Shell and France’s Total with a “buy” rating.

Among decliners, Italian football club Juventus slumped 11.7% after the breakaway European Super League was rocked by the departure of its six English clubs.

Dutch food delivery company Just Eat Takeaway fell 4.7% after the Financial Times reported Uber Eats was planning to launch in Germany.

Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta

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