We start the analysis for the European stock exchanges:
- Meggitt reaches a record thanks to the operation with Parker-Hannifin
- HSBC and AXA rise after results
- Allianz crashes over US investigation (Add comment and update prices)
Por Sruthi Shankar
Aug 2 (Reuters) – European stocks hit new highs on Monday, boosted by trading activity and strong results from Europe’s largest bank HSBC, while the rally in Asian stocks also helped kick off the month of August. With good feet.
The pan-European STOXX 600 index rose 0.6% to an all-time high of 464.5 points, with retailers, automakers and miners among the best performers.
British aeronautical engineering company Meggitt soared 58.2% to an all-time high after American industrial company Parker-Hannifin said it was buying its British rival in a deal valued at $ 8.76 billion.
Among other deals, British asset management services provider Sanne Group soared 7.9% after it said it could receive an offer to buy from fund manager Apex Group.
The UK mid-cap index gained 0.6%, while the top-notch FTSE 100 added 0.8%.
In terms of results, Asia-focused lender HSBC rose 0.5% after beating first-half pre-tax earnings forecast and restoring dividend payments.
French insurer Axa gained 2.5% after posting a 180% increase in its net income for the first half, while its German rival Allianz fell 6.4% after US regulators launched an investigation related to the funds. Structured Alpha from Allianz Global Investors.
Of the more than half of the STOXX 600 companies that have reported second quarter results so far, 67% have exceeded earnings estimates, according to Refinitiv IBES data.
“Having reached all-time highs following first quarter results, the breadth of positive earnings revisions in Europe remains very strong, both in absolute terms and compared to their peers,” say Morgan Stanley’s European equity strategists. in a note. “Europe now sees the best earnings reviews of all world regions.”
Meanwhile, a survey showed that manufacturing activity across the euro area continued to expand at a breakneck pace in July, but supply bottlenecks pushed up input costs.
Optimism around European earnings and the economic reopening helped the benchmark STOXX 600 end July with a sixth consecutive month of gains, despite concerns about inflation, rising virus cases in Asia and a important regulatory measure in China.
British aircraft and auto parts supplier Senior Plc soared 4.3% after posting a profit in the first half, compared to losses the previous year.
Its peer Melrose gained 6.2%, while Rolls-Royce added 3.5%.
The world’s second-largest brewer, Heineken, rose 0.6% after posting H1 earnings above expectations, but warned that rising raw material costs would affect margins.
German automaker Daimler rose 2.2% after Goldman Sachs added the value to its list of convinced values. (Information from Sruthi Shankar in Bengaluru; edited by Sriraj Kalluvila) Translates serenitymarkets.
Now let’s move on to global markets:
LONDON, Aug 2 (Reuters) – European stocks rallied in early trading on Monday as Asian stocks rallied overnight, with risk appetite fueled by recent strong earnings and a state infrastructure bill. United, although oil prices were affected by concerns about Chinese demand.
The MSCI World Equity Index, which includes stocks from 49 countries, was up 0.4% at 0805 GMT, after Asian stocks recovered some of their recent losses.
The MSCI main European index rose around 0.8%, while the Stoxx 600 reached a new all-time high, rising 0.7%.
Risk appetite was fueled by the prospect of more fiscal stimulus in the United States as senators unveiled a comprehensive $ 1 trillion infrastructure spending plan.
Early in the session, Chinese stocks rallied after selling sparked by regulatory measures in Beijing.
However, oil prices fell after a survey revealed that growth in Chinese factory activity fell sharply in July as demand contracted for the first time in more than a year, prompting concerns about demand in the second largest oil consumer in the world.
Factories in Asia hit a rough patch in July as rising input costs and a new wave of coronavirus infections overshadowed strong global demand, underscoring the fragility of the region’s recovery.
At 0805 GMT, Brent crude futures were down 1.2% and US West Texas Intermediate (WTI) crude futures were also down 1.2% on the day.
Market attention is now focused on July PMI data, as well as Tuesday’s Reserve Bank of Australia meeting, Thursday’s Bank of England meeting, and Friday’s US payroll data.
“Just a few weeks ago there was talk about whether central banks would feel confident enough to start reducing some of the stimulus measures that have been in place since the start of the pandemic, as the world economy recovers,” Michael Hewson, CMC Markets UK’s chief market analyst, said in a client note.
“This narrative seems to have shifted a bit towards whether the economic rebound that we have seen so far this year may already begin to stagnate, and begin to slow down.”
But UBS said in a client note that the rally in equities is justified and will continue.
“We believe the reopening and recovery trend is on the right track and we continue to see a rise for equities. However, we see the biggest gains in cyclical parts of the market, such as energy, financials and Japanese equities, “said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Manufacturing activity across the euro area continued to grow at a blistering pace in July as the reopening of the economy sent demand skyrocketing, but supply bottlenecks sent input costs skyrocketing.
Europe’s economic recovery beat all expectations in the latest quarter, while US consumers spent wildly in June as coronavirus restrictions eased, a trend likely to warrant a robust US payroll report later this year. week.
About 89% of the nearly 300 recent US earnings reports have beat analyst earnings estimates. Profits are now expected to have risen 89.8% in the second quarter, up from a forecast of 65.4% in early July.
Major bond yields fell in July. The yield on the benchmark 10-year German bond stood at -0.449% as of 0807 GMT, after starting last month at around -0.2%.
The 10-year US Treasury yield stood at 1.2372%, little changed on the day, but with a gradual decline since April.
On the currency side, the dollar index was down around 0.1% to 91.98, just above its one-month low, while the euro was up around 0.2% at 1.18855 Dollars.
The Australian dollar, which is considered a liquid indicator of risk appetite, was up 0.1%.
(Information from Elizabeth Howcroft; edited by Mike Harrison) Reuters. Translate serenitymarkets
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