Europe: Shares end at record high on strong earnings

[BENGALURU] European shares finished at a record high on Wednesday (Nov 3) following a strong batch of quarterly earnings, while heavyweight mining stocks recovered from recent losses as commodity prices rose.

The pan-European Stoxx 600 rose 0.4 per cent to a record-high close of 481.22 points, with basic resources stocks leading gains. The sector added 0.9 per cent, recovering from a near one-month low.

In earnings news, German software firm TeamViewer jumped 11 per cent after it confirmed its preliminary third-quarter results and annual outlook.

Lufthansa jumped 7 per cent after the airline posted a return to profit for the first time since the coronavirus crisis, boosted by the easing of travel restrictions.

Raiffeisen Bank International rose 10.9 per cent after its quarterly net profit blew past estimates on strong revenues and lower provisions.

Still, anticipation of an announcement on stimulus tapering by the US Federal Reserve kept most stock gains in check.

"Hopes of a reacceleration in growth, a pullback in real bond yields, and a supportive earnings season in Europe, which has come in above the historical average, are contributing to the renewed market rally," said Milla Savova, European equity strategist at Bank of America.

Savova, however, warned the recovery will prove short lived as major central banks consider scaling back on pandemic-era stimulus.

The Stoxx 600 kicked off November with consecutive record highs as investors looked past concerns about rising inflation caused by supply-chain bottlenecks and labour shortages, with earnings season proving to be much stronger than expected.

Profits for Europe Inc are expected to jump 57.2 per cent in the third quarter to 102.3 billion euros (S$160.13 billion) from the same quarter last year, new Refinitiv IBES data showed, an improvement from last week's 52 per cent growth forecast.

Oil stocks were major decliners on the Stoxx 600, falling 3.0 per cent, as crude prices fell after data pointed to a surge in US inventories and pressure mounted on OPEC to increase supply.

Gains in technology stocks powered France's CAC 40 index to a record high of 6,955.100 points.

Vestas, the world's largest maker of wind turbines, slumped 18.2 per cent after posting a lower-than-expected third-quarter operating profit and trimming its full-year profit forecast.

BMW inched up 1.5 per cent after the German automaker reported higher quarterly profit, but reiterated its warning on the global chip crunch.

French diagnostics specialist Biomerieux edged 0.1 per cent higher after Bloomberg reported that it was exploring a potential merger with Germany's Qiagen.

REUTERS