European shares scale new highs; Germany lags on weak data

Written by on November 5, 2021

November 5, 2021

By Anisha Sircar

(Reuters) – European equities hit a record high on Friday, marking the fifth straight session of notching new highs on fading concerns around global monetary policy tightening and positive earnings from some companies.

The pan-European STOXX 600 shook off initial sluggishness to rise for the seventh straight session, its longest winning streak since August, and was up 0.2%. The index was on track for gains of about 1.8% this week, its fifth consecutive week in the green.

Dovish moves by the U.S. Federal Reserve and the Bank of England, and similar comments from the European Central Bank chief have helped sentiment this week.

Investor focus now turns to U.S. nonfarm payrolls data due at 1230 GMT, which is likely to influence the timing of an interest rate hike by the Fed.

“Financial markets got hooked onto cheap money and ultra-low rates … stocks have been rising as this era of cheap money isn’t coming to an abrupt end just yet,” Susannah Streeter, an analyst at Hargreaves Lansdown, said.

However, gains were capped by Europe’s travel sector, which fell 0.8%, dragged down by a 2.2% slump in IAG. The British Airways parent company warned of a big loss in 2021 due to travel restrictions during the pandemic.

Material stocks also slipped 0.2% on worries about Chinese regulations on coking coal, while oil stocks slumped 0.4%.

On Friday, France’s benchmark CAC 40 index breached the 7,000 points barrier for the first time ever, and was up 0.3%.

The blue-chip index was led by insurer Axa, up 0.6% after launching a 1.7-billion-euro buyback. Gains in Kering, Hermes and L’Oreal also helped the index.

Germany’s DAX lagged regional peers after data showed industrial output unexpectedly fell in September as supply disruptions continued to take a toll on Europe’s biggest economy.

Gains in the STOXX 600 were led by Allegro, which surged 7.9% after the Polish e-commerce group agreed to buy Czech online retailer Mall Group for 881 million euros.

Spain’s CaixaBank also edged up 0.7% after saying it had sold its entire 9.92% stake in Austrian bank Erste Group for 1.503 billion euros. Erste added 4.5%.

A rebound in London-listed banks, which dropped after the Bank of England’s move on Thursday to hold rates, saw London’s FTSE 100 gain 0.4% to lead regional peers.

(Reporting by Anisha Sircar and Susan Mathew in Bengaluru; Editing by Shounak Dasgupta)


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