Europe: German stocks lead gains, all eyes on central bank meetings

GERMANY’S DAX index led gains among its European peers on Monday, boosted by Adidas shares after an analyst upgrade, while investor focus was largely on major central bank policy meetings scheduled through the week.

The pan-European Stoxx 600 index closed 0.2 per cent higher, with the DAX up 0.9 per cent.

German sportswear maker Adidas jumped 5.5 per cent to the top of DAX after Bernstein raised its rating on the stock to “outperform” from “market perform”, as it expects factors such as the return of Chinese influencers and Lionel Messi’s move to Inter Miami is “likely to drive US market share” for Adidas.

Luxury majors LVMH and Hermes climbed 1.8 per cent and 3 per cent, respectively, further supporting the Stoxx 600.

Meetings of the US Federal Reserve, the European Central Bank and the Bank of Japan are lined up for the week.

The Fed is seen holding rates steady at the end of its two-day policy meeting on Wednesday, while the ECB is expected to hike interest rates by another quarter percentage point on Thursday to tame stubborn inflation.

“The ECB has picked up momentum in the last three months or so, but up until then it was sticking to more conservative hikes,” said Daniela Hathorn, senior market analyst at Capital.com, noting the ECB was cautious at the beginning of the year amid a recession risk in Europe triggered by the energy crisis.

The Stoxx 600 started the year on a stronger footing compared to the S&P 500 index but lost steam during the second quarter due to a rise in preference for growth-oriented stocks as opposed to value stocks.

Meanwhile, UBS climbed 0.8 per cent on completion of its emergency takeover of embattled local rival Credit Suisse.

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Shares in Italian broadcaster MFE-MEDIAFOREUROPE NV rose as much as 5.9 per cent after founder and former Italian Prime Minister Silvio Berlusconi died at age 86.

Novartis added 0.7 per cent after it said it agreed to acquire Seattle-based biotech firm Chinook Therapeutics for up to US$3.5 billion.

Shares in SES tumbled 14.6 per cent to the bottom of the Stoxx 600 after the satellite company announced its chief executive Steve Collar would step down.

Ocado gained 3.6 per cent after BNP Paribas Exane upgraded stock. REUTERS