Banks, chipmaker Infineon help European stocks buck global gloom
(Reuters) -European stocks rose on Tuesday, as surging bank stocks and a positive earnings update from German chipmaker Infineon calmed nerves following a tech-fuelled selloff on Wall Street.
The pan-European STOXX 600 index gained 0.4% after closing at its lowest level since July 21 in the previous session.
Asian equities fell to their lowest in nearly a year on concerns about slowing growth and higher inflation, following a weak overnight finish on Wall Street that saw a selloff in Big Tech and other growth stocks. [MKTS/GLOB]
In Europe, bank stocks rose 1.4% to lead sectoral gains as optimism about economic reopenings and expectations of tighter monetary policy drove up bond yields. [GVD/EU]
Italy’s Unicredit, France’s Credit Agricole and UK’s Lloyds Banking Group rose between 2.2% and 3.3% after the U.S. banking index touched a record high on Monday.
“Rate-sensitive banking stocks are enjoying a boost as investors begin to seriously price in rate rises,” said Danni Hewson, financial analyst at AJ Bell.
“But there are big questions about how the economy is really bouncing back, and cost pressures are taking their toll on businesses and the consumer,” Hewson said.
Business growth in the euro zone slowed in September as supply issues constrained activity, while elevated inflationary pressures dented demand, IHS Markit’s survey showed.
Investors are now awaiting U.S. jobs data on Friday for signs on the tapering timeline of Federal Reserve asset purchases.
Automakers slipped 0.2% after data showed British new car registrations fell 35% last month, the weakest September for at least 23 years.
Infineon Technologies gained 1.6% after it confirmed its 2021 revenue and said it expects results to rise further next year as demand for power chips for cars, datacenters and renewable power generation soars.
Dutch tech investor Prosus rose 2% after it got regulatory approval to increase its stake in German food delivery company Delivery Hero.
British baker and fast-food chain Greggs climbed 3.8% after it raised its full-year profit outlook despite staffing and supply chain issues.
German leasing company Grenke tumbled 11.6% after it cut its full-year forecast range, citing global supply bottlenecks.
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