European stocks extend record rally after Xi-Biden talks, Prosus, Kering boost
By Shreyashi Sanyal
(Reuters) -Some European stock indexes extended their record rally on Tuesday, boosted by shares of Dutch technology investor Prosus and French luxury group Kering and lifted by optimism over easing in U.S.-China tensions.
The pan-European STOXX 600 closed 0.2% higher, while Germany’s DAX, France’s CAC 40, and euro zone shares all rose to new peaks.
Prosus NV rose 4.2% after forecasting higher profit for the first half of 2022 as it raised $12.3 billion from selling part of its stake in Tencent in April.
Kering was on top of the CAC 40, gaining 4.4% after its top brand Gucci said it expected 2021 revenues to be in line or higher than their pre-pandemic level. HSBC upgraded the stock to “buy”.
Markets remained positive through the day, which started with a key meeting between U.S. President Joe Biden and Chinese leader Xi Jinping that was viewed as evidence of improvement in the fraught relationship. [MKTS/GLOB]
Data showed euro zone gross domestic product (GDP) rose 2.2% quarter-on-quarter in the July-September period, as expected.
“The decent increase in euro-zone GDP in Q3 means that the recovery is now almost complete in most of the region,” said Jessica Hinds, Europe economist at Capital Economics.
The STOXX 600 has scaled fresh peaks in November as an encouraging earnings season, dovish signals from the European Central Bank and improving economic data helped investors look past inflationary pressures as well as a renewed surge in COVID-19 cases across the continent.
ECB President Christine Lagarde on Monday reiterated her push back against market bets for tighter monetary policy.
“We’re seeing record highs but only incremental moves, which is a sign of where we stand right now,” said Craig Erlam, senior market analyst at OANDA.
“Central banks are pushing for as long as they can to buy time and see if economies are in a good position to raise rates, at which point they could start to safely tweak their language. This is supporting markets.”
The telecom sector was boosted by a 0.5% jump in Vodafone after the company lifted its annual free cash flow outlook.
Portuguese food retailer Jeronimo Martins plunged 11.1% after Asteck, a unit of the Heerema Group, sold its entire 5% stake in the company.
(Reporting by Anisha Sircar and Shreyashi Sanyal in Bengaluru; editing by Uttaresh.V and Aditya Soni)