European shares close at record highs on financials boost (updated)

Coloplast A/S

07/05/2024 09:36

(Adds missing figure in para 4)

        * 
      Infineon jumps 12.9% on Q2 sales beat
    

        * 
      Zalando surges on Q1 operating profit beat 
    

        * 
      French cognac companies up on China's attitude to trade
dispute
    

        * 
      ECB can't be lenient with structural inflationary forces -
Nagel
    

  
 (Updated at 1629 GMT)
    By Ankika Biswas and Johann M  Cherian
       May 7 (Reuters) - European shares closed at record high
levels on Tuesday, with financials stocks in the spotlight
following upbeat earnings from Switzerland's UBS and Italy's
UniCredit, while optimism around interest rate cuts also helped.
    The pan-European STOXX 600  .STOXX  was up 1.1%, also
clinching its best day in over three months, while a market fear
gauge  .V2TX  dropped to over a month's low.
        The financials sector  .SXFP  rose 2.5%, boosted by a
7.6% jump in UBS  UBSG.S , after the lender's first quarterly
profit since taking over Credit Suisse, was three times
analysts' expectations.
    UniCredit  CRDI.MI , Italy's second-largest bank, gained
3.6% to a 13-year peak, steering the banks' index  .SX7E  2.3%
higher, as it raised its investor reward guidance after posting
a much higher-than-expected profit and boosting capital levels.
    Spain's main index  .IBEX  rose 1.5%, with BBVA  BBVA.MC  up
3.6% after Sabadell  SABE.MC  rejected the country's second
biggest lender's takeover proposal.
        Following a rough patch in April during which the main
index lost over 1.5%, the STOXX recovery has gathered steam over
the past three sessions, but is still lagging its peers in the
U.S.
  
        "Inflation is normalising and earnings are starting to
pick up again, all at a time when valuations both in absolute
terms, and relative to history, and against the United States,
is still fairly low," said Maximilian Kunkel, chief investment
officer for Global Family & Institutional Wealth at UBS.
  
        On the day, Germany's DAX  .GDAXI  surged 1.4%, driven
by a 12.9% jump in chip manufacturer Infineon  IFXGn.DE  after
better-than-expected second-quarter sales, with analysts
expecting long-term growth despite a full-year guidance cut.    
    Further, spirits makers Remy Cointreau  RCOP.PA  and Pernod
Ricard  PERP.PA  jumped 5% and 3%, respectively, after Chinese
President Xi Jinping's "open attitude" towards a trade dispute
over French cognac.
        The retail sub-index  .SXRP  also rose 1.4% as Germany's
Zalando  ZALG.DE  gained 8.5% after delivering a
better-than-expected first-quarter operating profit.
    On the flip side, German software developer TeamViewer
 TMV.DE  dropped 8.1% after a first-quarter results miss, while
Danish medical equipment maker Coloplast  COLOb.CO  fell 3.5%
after a second-quarter earnings miss.
    Germany's Fresenius Medical Care  FMEG.DE  shed 5.5% after
only maintaining its 2024 profit outlook despite a first-quarter
operating earnings beat.
    Elsewhere, Britain's FTSE 100  .FTSE  hit a record high, up
xx%, boosted by a 1.3% gain in Shell after Reuters reported its
plans to sell the Malaysian gas station business.
        
    Bundesbank President Joachim Nagel
     said deep structural changes in the euro zone economy could
put upward pressure on inflation for years to come but the
European Central Bank should still not tolerate quicker price
growth. 
  

 (Reporting by Ankika Biswas and Johann M Cherian in Bengaluru;
Editing by Sherry Jacob-Phillips, Savio D'Souza and Ed Osmond)
 ((Ankika.Biswas@thomsonreuters.com;))