x

Abu Dhabi, UAEWednesday 20 June 2018

European stocks riding high in early trade

Markets boosted by commodity firms and banking stocks as well as a string of solid updates

European shares rose, with strong performances from banks and tech firms. Jochen Eckel for The National
European shares rose, with strong performances from banks and tech firms. Jochen Eckel for The National

Strength among commodity firms and banking stocks as well as a string of solid updates boosted European shares in early deals on Tuesday.

Earnings season remains front and centre for equities investors though focus will also be on the two-day US Federal Reserve meeting which gets underway later in the day.

The pan-European STOXX 600 index rose 0.3 per cent, bolstered by strength in mining firms and banks while blue chips gained 0.4 per cent.

Germany's DAX rose 0.1 per cent, and the commodity-heavy FTSE 100 was up 0.5 per cent.

Corporate results season gathered steam with the British property developer Segro and the business media group Informa leading STOXX risers after well-received first-half updates, both gaining around 4.5 per cent.

Europe's tech sector was also buoyant after iPhone supplier AMS raised its mid-term revenue target, while computer peripherals and mobile speaker maker Logitech also raised its outlook.

Dutch paints maker Akzo Nobel was one of the biggest individual drags on the STOXX, however, falling 1.3 per cent after its second quarter profit missed forecasts. Updates also weighed on the paper maker UPM, the chemicals firm Croda International, the chocolate-maker Lindt & Spruengli and Domino's Pizza, which all fell between 3 per cent to 6.5 per cent.

While it is still early days for the European second quarter earnings season as only 20 per cent of firms have given updates, more than half of those firms have beaten analysts' expectations, according to Thomson Reuters data.

European deal-making also rolled on with US retailer Michael Kors agreeing to buy luxury shoemaker Jimmy Choo for US$1.2 billion, sending Jimmy Choo's shares up 16.8 percent to an all-time high.

Reuters