European markets close higher as stocks rebound on bargain hunting

European Union
European Union

European stocks rebounded on Tuesday, due largely to bargain hunting after sharp falls in the previous session on mounting worries about the spread of the Delta variant of the coronavirus in several countries.

The pan-European Stoxx 600 moved up 0.52 per cent. Britain’s FTSE 100 gained 0.5 per cent, Germany’s DAX surged up 0.56 per cent and France’s CAC 40 climbed 0.87 per cent, while Switzerland’s SMI ended 0.7 per cent up.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Norway, Poland, Spain and Sweden ended notably higher, while Netherlands, Portugal and Russia edged up marginally. Denmark, Iceland and Turkey closed weak.

In the British market, Rolls-Royce Holdings, Berkeley Group Holdings, JD Sports Fashion, Melrose Industries, Scottish Mortgage, ITV, ABRDN, Glencore and WPP gained 2 to 3.5 per cent.
EasyJet shares moved higher after the airliner reported a smaller-than-expected pre-tax quarterly loss. Just Eat Takeaway, Fresnillo, Avast, Ocado Group, Intertek Group and Imperial Brands ended sharply lower.

In the French market, Alstom gained nearly 4 per cent after reporting a sharp 146-per-cent jump in first quarter sales at 3.7 billion euros (4.4 billion dollars). Technip, Unibail Rodamco, ArcelorMittal, Airbus, Capgemini, BNP Paribas, Legrand, Credit Agricole, Publicis Groupe, Societe Generale, LOreal, Saint Gobain, Thales and Kering gained 1.2 to 4 per cent.

In Germany, Linde, Deutsche Bank, Lufthansa, HeidelbergCement, Bayer, MTU Aero Engines, Covestro, Allianz, Volkswagen and Continental gained 1 to 2.5 per cent.

Swiss bank UBS Group AG rallied sharply after posting better-than-expected profit in the second quarter.

Shares of Swedish home appliances maker Electrolux AB ended 6.5 per cent down after the company posted a lower-than-expected second quarter operating profit and warned global supply chain woes would worsen in coming months.

Similarly, commercial vehicle manufacturer Volvo Group shares declined 2.5 per cent, after the company warned of more production disruptions and stoppages this year amid a global shortage of semiconductors.

In the Norwegian market, Telenor gained in strength after raising its full-year annual outlook.

In economic releases, German producer prices grew 8.5 per cent on a yearly basis in June, bigger than the 7.2-per-cent rise posted in May, data published by Destatis revealed. Economists had forecast an increase of 8.4 per cent.

This was the fastest rise since January 1982, when prices grew sharply amid second oil crisis.

The euro area current account surplus dropped to a seasonally adjusted 12 billion euros in May from 22 billion euros in April, data from the European Central bank showed. In the same period last year, the surplus totalled 6 billion euros.

The surplus on goods trade remained unchanged at 25 billion euros, while the surplus on services trade dropped to 6 billion euros, from 9 billion euros.

Switzerland’s exports grew at a softer pace in the second quarter, data from the Federal Customs Administration showed. Exports increased 1 per cent sequentially in the second quarter, after a 5-per-cent rise in the first quarter, while imports grew 1.2 per cent in the second quarter, after a 1.7-per-cent rise in the previous quarter.

The trade surplus rose to 11.525 billion francs (12.5 billion dollars) in the second quarter from 11.4 billion francs in the previous quarter. In the second quarter of 2020, the trade surplus was 9.093 billion francs.

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