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Europe: Shares end at 5-week high as relief bounce continues
[LONDON] European shares rose to a five-week high on Tuesday, extending the relief bounce seen in the previous session as worries about Hurricane Irma and North Korea's nuclear standoff eased.
All major trading centres and most sectors ended in positive territory as the pan-European STOXX 600 gained 0.55 per cent, although some investors questioned how sustainable current markets levels are.
"Whether that equity reaction is Panglossian complacency or a sign of wonderful underlying fundamentals remains open to question," ING wrote, adding that "even Category 5 storms can now be added to the list of things that 'Don't Really Matter'".
Financial stocks were yet again among the top performers, with banks and financial services up 1.6 and 1.1 per cent respectively.
Insurance firms, which fuelled Europe's rise on Monday with a roughly 2 per cent jump, were again in positive territory, edging up 0.8 per cent. "The structure of today's open is typically 'risk-on'," said Pierre Martin, a senior sales trader at Saxo Bank, noting that the positive trend for banking stocks or automobile shares showed investors' moods were off geopolitical and climate worries and back to more positive corporate and macroeconomic news.
Volkswagen rose 1.9 per cent after announcing a 20 billion euro plan to develop zero-emission vehicles and other constructors were also gaining ground, such as Peugeot which topped France's blue chip CAC 40 index with a 3.8 per cent rise.
Novartis gained 1.3 per cent as it reported that its biosimilar rituximab to treat blood cancers and immunological diseases such as rheumatoid arthritis was accepted for review by the US Food and Drug Administration (FDA).
Among losers, French veterinarian pharmaceutical company Virbac sank 16.3 per cent after cutting its full-year outlook.
British home builders were also under pressure with Taylor Wimpey losing 1.4 per cent and Barrat Development 1.7 per cent after a report highlighted risks to the sector, a trader said.