Europe: Shares see off January muted as falling tech stocks offset healthcare gains
EUROPEAN shares ended flat on Wednesday (Jan 31), as losses in technology stocks countered gains fostered by upbeat earnings, while a strong forecast by drugmaker Novo Nordisk helped Copenhagen shares scale record highs.
The pan-European Stoxx 600 index held steady at 485.67 at close, logging a 1.4 per cent rise in January, its third consecutive monthly gain.
Heavyweight healthcare stocks were in the spotlight, advancing 0.5 per cent with Danish drugmaker Novo Nordisk adding 3.6 per cent to notch an all-time high after Europe’s most valuable company forecast another year of double-digit growth.
The stock pushed Copenhagen’s OMX 20 to a fresh record high, closing 2.3 per cent higher.
Also adding to the sector’s gains was GSK, which gained 2.0 per cent after beating fourth-quarter estimates.
Beijer Ref jumped 11.9 per cent after the Swedish wholesaler of cooling technology reported quarterly sales above expectations and forecast continued growth in 2024, while Spanish lender Santander rose 2.1 per cent after posting record-high profit for the last quarter of 2023, beating forecasts.
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The European real estate index advanced 1.0 per cent, lifted by a 6.3 per cent rise in Germany’s TAG Immobilien after HSBC upgraded its rating to “buy”.
Swiss drugmaker Novartis fell 3.5 per cent on missing estimates for fourth-quarter profit, while H&M slumped 12.4 per cent to the bottom of the Stoxx 600 after the Swedish fashion retailer revealed its sales for December and January fell by 4 per cent compared with the previous year, while the company also announced a surprise CEO exit.
Technology, which houses most of Europe’s chipmakers, fell 0.6 per cent, tracking losses in their US counterparts.
On the data front, French consumer prices rose 3.4 per cent year-on-year in January, a touch above expectations, but inflation slowed from the previous month, according to preliminary data. A separate reading showed German inflation eased slightly further than expected in January to 3.1 per cent.
“The economy has been pretty weak for about a year and the data today confirms a further decline in inflation in Europe,” said Joost van Leenders, senior investment strategist at Van Lanschot Kempen.
Government bond yields across Europe dipped tracking a strong rally in United States Treasuries that pushed yields lower after US jobs data.
Investor attention will now shift to the Federal Reserve’s interest rate verdict, due at 1900 GMT, for clues regarding the timing of interest rate cuts in the world’s largest economy.
“When you look at the comments of Fed policymakers over the past weeks, they’ve pushed back against very early rate cuts ... I don’t think that (Fed chair) Powell will want to get those expectations for a March cut back into the market,” added Van Lanschot Kempen’s Leenders. REUTERS
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