Banks, chipmaker Infineon help European stocks tackle global gloom


The DAX chart of the German stock index is pictured on the stock exchange in Frankfurt, Germany on September 29, 2021. REUTERS / Staff

  • Banks jump on rate expectations
  • Eurozone business growth slowed in September – PMI
  • Infineon on optimistic forecasts

October 5 (Reuters) – European stocks rose on Tuesday as surging bank stocks and a positive earnings update from German chipmaker Infineon calmed nerves following a tech-fueled sell-off on Wall Street.

The pan-European STOXX 600 index (.STOXX) gained 0.4% after closing at its lowest level since July 21 in the previous session.

Asian stocks fell to their lowest level in nearly a year amid concerns over slowing growth and rising inflation, after a weak end of the day on Wall Street that saw a sell off in Big Tech and other growth stocks.

In Europe, bank stocks (.SX7P) rose 1.4% to lead sector gains as optimism over economic reopenings and expectations of tighter monetary policy pushed bond yields higher. GVD / EU

Italian Unicredit (CRDI.MI), French Crédit Agricole (CAGR.PA) and Britain’s Lloyds Banking Group (LLOY.L) rose 2.2% to 3.3% after the US banking index ( .SPXBK) hit a record high on Monday.

“Rate-sensitive bank stocks are getting a boost as investors begin to seriously factor in rate hikes,” said Danni Hewson, financial analyst at AJ Bell.

“But there are big questions about how the economy is really rebounding, and cost pressures are wreaking havoc on businesses and consumers,” Hewson said.

Business growth in the euro area slowed in September as supply issues limited activity, while high inflationary pressures weighed on demand, according to the IHS Markit survey. Read more

Investors are now awaiting US employment data on Friday for signs of the Federal Reserve’s declining asset purchase schedule.

Automakers (.SXAP) slipped 0.2% after data showed UK new car registrations fell 35% last month, the weakest September in at least 23 years. Read more

Infineon Technologies (IFXGn.DE) gained 1.6% after confirming its 2021 revenue and said it expects results to rise further next year as demand for power chips for cars, data centers and renewable energy production is skyrocketing.

Dutch tech investor Prosus (PRX.AS) rose 2% after obtaining regulatory approval to increase its stake in German food delivery company Delivery Hero (DHER.DE).

British bakery and fast food chain Greggs (GRG.L) climbed 3.8% after raising its profit outlook for the year despite staff and supply chain problems. Read more

German leasing company Grenke (GLJn.DE) fell 11.6% after narrowing its forecast range for the full year, citing bottlenecks in global supply.

Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Edited by Sriraj Kalluvila and Ramakrishnan M.

Our Standards: The Thomson Reuters Trust Principles.

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