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Europe: Shares snap losing streak, financials and industrials firmer
[LONDON] European shares rose on Thursday to break a four-day losing streak, boosted by dovish US Federal Reserve minutes as financial and industrial stocks stood out.
The pan-European STOXX 600 index was up 0.7 per cent at the close. This index is down about 7 per cent so far this year, though it has recovered much of the ground lost in the immediate aftermath of June's Brexit vote.
Wall Street rallied overnight, lifting Asian stocks, after the minutes from the latest Fed meeting showed policy committee members opposed to a near-term rate hike outnumbered those who wanted one.
"When you get yourself on the back foot, it takes a while to steady the ship, but the general backdrop of quantitative easing and low interest rates is keeping equities up," said Rupert Baker, a European equity sales executive at Mirabaud Securities.
Shares in Danish wind turbine maker Vestas Wind surged around 10 per cent after stronger-than-expected second-quarter operating profit and raised 2016 forecasts.
Dutch insurer NN Group climbed 8.8 per cent after posting a less bad drop in earnings than many analysts had feared, lifting other financial stocks in the region.
Credit Suisse equity strategist Andrew Garthwaite backed staying "overweight" on stocks displaying the best growth characteristics, and tipped software group SAP and glasses maker Luxottica among others.
Francois Savary, chief investment officer at Geneva-based fund management and consultancy firm Prime Partners, was more cautious, pointing to a recent rise in Portuguese bond yields as highlighting the persistently weak economic backdrop facing Europe.
"I would look to sell on the equity rally and for stock markets to consolidate in the coming weeks," he said.