finance

M&A rush, earnings power European stocks to new highs



© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 29, 2021. REUTERS/Staff/File photo

By Sruthi Shankar

(Reuters) -European stocks scaled fresh peaks on Monday, driven by dealmaking activity and strong results from Europe’s biggest bank HSBC, with a rebound in Asian stocks also helping set a bright start to August.

The pan-European index rose 0.6% to hit an all-time high of 464.5 points, with retailers, automakers and miners among the top performers.

British aero-engineer Meggitt (LON:) soared 58.2% to hit a life high after U.S. industrial firm Parker-Hannifin said it would buy the UK rival in a deal valued at $8.76 billion.

Among other deals, British asset management services provider Sanne Group jumped 7.9% after it said it could get a takeover bid from fund servicer Apex Group.

UK’s midcap index gained 0.6%, while the blue-chip added 0.8%. ()

In earnings, Asia-focussed lender HSBC inched up 0.5% after it beat forecasts for first-half pretax profit and reinstated dividend payments.

French insurer Axa gained 2.5% after it posted a 180% surge in first-half net income, while German rival Allianz (DE:) tumbled 6.4% after U.S. regulators started a probe relating to Allianz Global Investors’ Structured Alpha Funds.

Of the more than half of the STOXX 600 companies that have reported second-quarter results so far, 67% have topped profit estimates, as per Refinitiv IBES data.

“Having reached all-time highs post 1Q results, the breadth of positive EPS revisions in Europe remains very strong both in absolute terms and versus peers,” European equity strategists at Morgan Stanley (NYSE:) said in a note. “Europe now sees the best earnings revisions of all global regions.”

See also  UK payrolls return to pre-pandemic levels, with vacancies at record – business live

Meanwhile, a survey showed manufacturing activity across the euro zone continued to expand at a blistering pace in July, but supply bottlenecks sent input costs soaring.

Optimism around European earnings and economic reopening helped the benchmark STOXX 600 end July with a sixth straight month of gains despite concerns about inflation, soaring virus cases in Asia and a major regulatory crackdown in China.

British jet and auto parts supplier Senior Plc (LON:) jumped 4.3% after it reported a first-half profit compared with a loss a year earlier.

Peer Melrose gained 6.2%, while Rolls-Royce (LON:) added 3.5%.

The world’s second-largest brewer Heineken inched up 0.6% after reporting first-half earnings above expectations, but warned rising commodity costs would eat into margins.

German carmaker Daimler rose 2.2% after Goldman Sachs (NYSE:) added the stock to its conviction list.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

See also  UK's NIESR sees 15-25% fall in GDP in second quarter due to coronavirus





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.  Learn more