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Europe: Shares pushed up by healthcare and consumer stocks
[LONDON] Gains in major healthcare and consumer goods stocks propped up European equities on Tuesday, partly offsetting persistent concerns over the region's banking system.
The pan-European STOXX 600 index closed up 0.1 per cent, while the similar FTSEurofirst 300 index advanced 0.2 per cent.
Healthcare stocks outperformed to add the most points to the market, with Danish insulin maker Novo Nordisk climbing 2.9 per cent after brokerage Nordea forecast another boost for the company's Victoza diabetes product.
Some consumer goods and leisure stocks also outperformed, with Hermes, drinks maker Campari and sportswear company Adidas all touching record highs.
Berkeley Futures associate director Richard Griffiths said those stocks were benefiting from being considered as relative"safe havens", given the market uncertainty following Britain's shock vote in June to quit the European Union.
Other traders added that record low interest rates in the euro zone were helping consumer goods companies as lower rates could encourage people to spend more in spite of the weakening economic outlook caused by Brexit. "Those safe-haven sectors such as healthcare and consumer goods are well supported," said Griffiths.
However, bank stocks came under renewed pressure before Friday's release of European-wide stress tests.
Banks have been the worst sectoral performer this year due to concerns over capital being squeezed by margin pressure caused by ultra low interest rates.
Commerzbank shares fell 4.5 per cent after the German lender posted a decline in second-quarter core capital.
The FTSE Italia All Share Banks index also dipped 0.3 per cent, with the index down around 50 per cent in 2016 due to worries about Italian banks' bad debts.
Shares in Italian bank Monte dei Paschi fell 1.2 per cent, with a source telling Reuters that Monte dei Paschi was working on a five billion euro (S$7.5 billion) capital increase as part of plans to fix its balance sheet.