Europe: Earnings, metal rally spur stocks to record high

[BENGALURU] European stocks closed at a record high on Thursday as a rally in commodity prices lifted mining stocks and a slate of upbeat earnings reports offset worries about the pace of Covid-19 vaccinations.

The pan-European Stoxx 600 index rose 0.5 per cent in its third session of gains, with miners jumping 1.5 per cent.

Travel & leisure stocks closed up 0.1 per cent after hitting a record high earlier in the session.

The UK's commodity-heavy FTSE 100 rose 0.6 per cent to its highest level since February 2020 as a surge in metals prices lifted shares of companies such as Rio Tinto, Anglo American and BHP.

While European stocks have now recovered all of their pandemic-induced losses from last year, they have lagged their US counterparts due to a choppy Covid-19 vaccine roll-out as well as a new wave of infections across the continent.

US drugmaker Johnson & Johnson this week delayed the roll-out of its Covid-19 shot in Europe, while Denmark said it would drop a similar vaccine from AstraZeneca over the risk of blood clotting.

"The euro zone economy might lag others more than we had expected previously because of the concerns around AstraZeneca,"said Paul Jackson, global head of asset allocation research at Invesco.

"Notwithstanding that, once they are vaccinated, European countries have more to gain than most others."

With US economic data and corporate earnings reports reinforcing expectations of a swift global economic rebound, attention this month will turn to the quarterly earnings season in Europe.

Analysts expect earnings at Stoxx 600 firms to rebound more than 50 per cent in the first quarter following a slide of nearly 40 per cent in the same quarter a year earlier, according to Refinitiv I/B/E/S data.

On Thursday, Swiss engineering company ABB rose 3.1 per cent after raising its full-year sales outlook, while French advertising group Publicis gained 3.3 per cent as it returned to organic growth for the first time since before the pandemic.

Shares in Publicis' British rival WPP rose 0.5 per cent.

German real estate companies Deutsche Wohnen, LEG Immobilien and TAG Immobilien rose between 0.9 per cent and 2.5 per cent after the Constitutional Court ruled that a law putting a rent cap on apartments in Berlin was invalid.

Britain's food delivery company Deliveroo slipped 3.8 per cent even as its quarterly orders more than doubled in its first trading update since its underwhelming market debut last month.

Norwegian lender Sbanken soared 30.3 per cent after the country's largest bank DNB agreed to buy the smaller competitor in a deal worth 11.1 billion Norwegian crowns (S$1.74 billion).


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to