Best session in 11 weeks for European stocks as banks surge (updated)
05/10/2021 09:49
* Banks jump on rate expectations
* Euro zone business growth slowed in Sept - PMI
* Infineon up on upbeat forecast
(Updates to close)
By Sruthi Shankar and Susan Mathew
Oct 5 (Reuters) - A 3.5% jump in European banks and a rally
in beaten down technology companies pushed an index of European
stocks up over 1% on Tuesday, also helped by positive U.S. data
bolstering Wall Street.
The European tech sector .SX8P jumped 2.2%, breaking a
seven-session losing run over which it fell 11.7%. U.S. peers
also rallied as investors moved into growth names. .N
Chipmaker Infineon's IFXGn.DE 4.8% climb led gains after
it confirmed its 2021 revenue and said it expects results to
rise further next year. urn:newsml:reuters.com:*:nFWN2R00SY
The pan-European STOXX 600 index .STOXX ended up 1.2% with
all major sectors in the black, helping it log its best session
since July 21.
Bank stocks .SX7P hit an over 1-1/2 year high. JPMorgan
JPM.N said it is still "overweight" on European banks citing
upside to capital return and rates outlook. urn:newsml:reuters.com:*:nL8N2R12DG
Spain's BBVA BBVA.MC , Italy's Intesa Sanpaolo ISP.MI and
Finland's Nordea Bank NDAFI.HE were JPM's top picks. Shares in
Italy's Unicredit CRDI.MI jumped 4.3% after the bank confirmed
its third-quarter forecast to analysts. urn:newsml:reuters.com:*:nL8N2R11TK
"Rate-sensitive banking stocks are enjoying a boost as
investors begin to seriously price in rate rises," said Danni
Hewson, financial analyst at AJ Bell.
"But there are big questions about how the economy is really
bouncing back, and cost pressures are taking their toll on
businesses and the consumer," Hewson said.
Business growth in the euro zone slowed in September as
supply issues constrained activity, while elevated inflationary
pressures dented demand, IHS Markit's survey showed.
urn:newsml:reuters.com:*:nL1N2R10FV
"The PMIs are consistent with the euro-zone's economic
recovery losing some momentum... The surveys also show that
price pressures are spreading to the services sector, even in
parts of the periphery," said Jessica Hinds, Europe economist at
Capital Economics.
Investors are now awaiting U.S. jobs data on Friday for
signs on the tapering timeline of Federal Reserve asset
purchases. Data on Tuesday showed U.S. services industry
activity nudged up in September. urn:newsml:reuters.com:*:nN9N2NL02A
British baker and fast-food chain Greggs GRG.L climbed
11.1% to top the STOXX 600 after it raised its full-year profit
outlook despite staffing and supply chain issues. urn:newsml:reuters.com:*:nL8N2R10ZG
Third-quarter earnings for companies listed on the STOXX 600
are expected to increase 45.6% from a year ago, according to
Refinitiv data.
German leasing company Grenke GLJn.DE tumbled 6.7% after
it cut its full-year forecast range, while audio solutions
provider GN Store Nord GN.CO slumped 7% after a forecast cut
at the company's Hearing unit due to delays in product launches.
urn:newsml:reuters.com:*:nL8N2R1155 urn:newsml:reuters.com:*:nL8N2R11HQ
Dutch tech investor Prosus PRX.AS rose 2.6% after it got
regulatory approval to increase its stake in German food
delivery company Delivery Hero DHER.DE . urn:newsml:reuters.com:*:nASN001Q42
(Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru;
Editing by Sriraj Kalluvila, Ramakrishnan M. and Bill Berkrot)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6182 2787;))