European stocks end slightly higher as defence firms hit record high (updated)
07/08/2023 10:03
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STOXX 600 ends up 0.1%
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Defence firms rally to record high
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Siemens Energy shares drag
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EZ investor mood stops nosedive in August
(Updated at 1600 GMT)
By Shashwat Chauhan, Amruta Khandekar and Shristi Achar A
Aug 7 (Reuters) - European stocks edged higher on Monday
as investors awaited key inflation figures from across the globe
this week to gauge the outlook for interest rates, while the
defence sector rose to record highs amid rising geopolitical
uncertainty.
The pan-European STOXX 600 .STOXX closed up 0.1% ahead of
inflation readings from Germany, China and the U.S. later this
week, all likely to drive expectations on how long interest
rates could remain high.
The basic resources index .SXPP was down 1.0% as shares of
Aurubis AG NAFG.DE fell 9.5% despite Europe's largest copper
producer reiterating its forecast for a strong core profit in
its current financial year.
"We've seen a little bit of negative momentum from these
earnings because investors are punishing the fact that these
results are actually even more dire than expected, considering
that expectations were already pretty low," said Daniela
Hathorn, senior market analyst at Capital.com.
Stemming losses, the healthcare sector .SXDP gained 0.6%,
lifted by 3.1% gains in Bavarian Nordic BAVA.CO after the
Danish biotech company reported positive late stage topline
results for its Chikungunya virus vaccine.
Europe's aerospace and defence index .SXPARO hit a record
high, rising 1.0%, with Italy's Leonardo LDOF.MI and
London-listed Melrose MRON.L up 3.1% and 2.6% respectively.
"We're still talking about the Chinese and Ukrainian
conflict. So geopolitical risk is increasing and that's good for
that part of the market," said Anthi Tsouvali, multi-asset
strategist at State Street Global Markets.
Major European bourses were mixed, with London's
commodity-heavy FTSE 100 down 0.1%, while France's blue-chip CAC
40 index .FCHI rose 0.1%.
Pressuring Germany's DAX .GDAXI , Siemens Energy ENR1n.DE
dropped 6.1%, having shuttled between gains and losses
throughout the day.
The German energy group said problems recently unveiled at
its wind turbine unit would cost it 2.2 billion euros ($2.4
billion), well short of worst-case estimates but still casting
doubt over the future of the business.
The benchmark STOXX 600 posted its first weekly decline in
four on Friday as a mixed U.S. jobs data, slowing business
activity across the euro zone and a surprise U.S. credit rating
downgrade all dented the mood.
Meanwhile, a Sentix survey showed investor morale in the
euro zone unexpectedly rose in August, ending three consecutive
months of decline as inflation lost some of its explosive power,
but there were no signs of a lasting turnaround in sentiment.
Scout24 SE G24n.DE jumped 5.4% after the online property
platform raised its full-year guidance, while PostNL PTNL.AS
climbed 9.5% after the Dutch postal firm lifted its 2023
operating profit guidance.
(Reporting by Shashwat Chauhan, Sruthi Shankar, Amruta
Khandekar and Shristi Achar A in Bengaluru; Editing by Varun H K
and Alex Richardson)
((Shashwat.Chauhan@thomsonreuters.com;))