European shares rally on rate pause hopes, upbeat results (updated)
02/11/2023 10:08
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
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US, UK, Norway keep rates unchanged
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Euro zone factory downturn deepened in Oct
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Shell reports $6.2 bln third-quarter profit
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Novo Nordisk up after Q3 profit, Wegovy sales beat
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STOXX 600 up 1.6%
(Updated at 1650 GMT)
By Ankika Biswas and Bansari Mayur Kamdar
Nov 2 (Reuters) -
European shares climbed over 1% on Thursday, led by
rate-sensitive real estate and technology stocks, on growing
optimism that central banks are done tightening credit after the
U.S., UK and Norway kept interest rates unchanged this week.
The pan-European STOXX 600 index .STOXX closed 1.6%
higher, touching a fresh two-week high.
UK's FTSE 100 .FTSE gained 1.4% after the Bank of England
held interest rates at a 15-year peak, while Norwegian stocks
.OBX climbed 0.7% after Norges Bank also kept rates steady.
"The Bank of England may have kept rates on hold, but
we're seeing the first signs of pushback against financial
markets which are starting to price in rate cuts for 2024," said
James Smith, developed markets economist at ING Economics, in a
note.
"We think investors are right to be thinking that way
and we expect the first cut over summer next year."
Overnight, Fed Chair Jerome Powell maintained the option of
another hike if progress on inflation stalls, but said that a
rise in market-based interest rates may begin to weigh on the
economy.
"Powell acknowledged that a rise in long-term yields have
tightened financial conditions," said Mohit Kumar, chief
economist Europe at Jefferies. "Our read of the press conference
is that it supports our view that the Fed is done with hikes."
Real-estate stocks .SX86P rose 5.2% to lead sectoral
gains, while technology .SX8P climbed 2.7%.
Data showed euro zone manufacturing activity slowed
again last month in a broad-based downturn, with new orders
contracting at one of the steepest rates since 1997. And German
unemployment rose more than expected in October, showing some
cracks in an otherwise resilient labour market.
Earnings beats also lifted sentiment.
Finnish residential real estate group Kojamo KOJAMO.HE
rallied 16.7% to the top of the STOXX 600 index after posting
better-than-expected quarterly results.
Swiss staffing company Adecco Group ADEN.S jumped
13.9% on a better-than-expected third-quarter net profit.
Ferrari RACE.MI gained 5.6% after raising its 2023
earnings outlook, lifting the automobiles index .SXAP 3%.
Shell SHEL.L gained 4.2% following in-line third-quarter
earnings of $6.2 billion and news of an increased share buyback
programme.
Novo Nordisk NOVOb.CO rose 3.2% as it estimated another
year of double-digit sales growth for its two most popular
drugs, even after cautioning that supply of its Wegovy
weight-loss injection would remain limited in the short to
medium term.
Meal delivery firms Just Eat Takeaway TKWY.AS Delivery
Hero DHER.DE , HelloFresh HFGG.DE Deliveroo ROO.L gained
between 1.2% and 7.9% following U.S. peer DoorDash's DASH.O
strong fourth-quarter core profit forecast.
ING INGA.AS fell 1.8%, with analysts citing a poor beat in
third-quarter net profit and a net interest income miss.
(Reporting by Ankika Biswas and Bansari Mayur Kamdar in
Bengaluru; Editing by Savio D'Souza, Shinjini Ganguli and
Richard Chang)
((Ankika.Biswas@thomsonreuters.com;))