European shares gain on Ukraine hopes; Volkswagen surges on strong results (updated)

Sixth Street Specialty Lending

14/03/2022 09:40

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    * China-exposed miners, luxury stocks fall
    * Volkswagen surges on upbeat earnings 
    * Prosus slumps on China tech regulation worries  

 (Adds analyst comments, market details, updates prices)
    By Sruthi Shankar and Shreyashi Sanyal
    March 14 (Reuters) - European stocks rose on Monday,
clinging to hopes of diplomatic efforts by Ukraine and Russia to
end weeks-long conflict, while shares in Volkswagen surged after
the German carmaker doubled its operating profit.   
    The pan-European STOXX 600 index  .STOXX  ended 1.2% higher,
extending gains from Friday when Russian President Vladimir
Putin signalled a positive shift in talks with Ukraine.
    Russia and Ukraine gave their most upbeat assessments
following weekend negotiations, even as Russia attacked a base
near the Polish border and fighting raged elsewhere.
 urn:newsml:reuters.com:*:nL2N2VH034
    "The initial fighting in Ukraine prompted an outbreak of
risk aversion in markets, but for now the situation seems to
have settled down, at least for markets," said Chris Beauchamp,
chief market analyst at online trading platform IG.
    "Western intervention still looks highly unlikely, and for
now negotiations continue ... For now it looks like bullish
sentiment will revive, but there are still plenty of unknowns to
deal with."     
    Auto stocks  .SXAP  climbed 3.3% to lead gains among
sectors. Volkswagen AG  VOWG_p.DE  surged 4.4% as higher prices
and a more favourable product mix boosted operating profit.
 urn:newsml:reuters.com:*:nL5N2VE5LP
    However, China-exposed miners  .SXPP , which have
outperformed recently, fell 2.6%, as surging COVID-19 infections
in the world's top metals consumer fanned worries over economic
growth prospects.  urn:newsml:reuters.com:*:nL2N2VH08D
    Shares of luxury brands such as LVMH  LVMH.PA  and Richemont
 CFR.S , which depend on China for a large part of their sales,
also declined. 
    Investors waited for policy decisions from the U.S. Federal
Reserve and the Bank of England later this week, with both the
central banks expected to raise interest rates.  urn:newsml:reuters.com:*:nL2N2VE1FY
    Banks  .SX7P  gained 3.2%, extending a rebound from one-year
lows hit last week as investors ramped up expectations of rate
hikes to combat soaring inflation. 
    Hopes of progress in peace talks sent oil prices lower. Oil
has surged this month after Western sanctions against Russia
over its invasion of Ukraine raised concerns about supply
disruptions.  O/R   MET/L   
    Telecom Italia  TLIT.MI  climbed 5.0% after it said it would
start formal talks with KKR  KKR.N  to assess the U.S. fund's
potential 10.8 billion-euro ($11.8 billion) offer for Italy's
biggest phone group.  urn:newsml:reuters.com:*:nL5N2VG10V
    Dutch tech investor Prosus  PRX.AS , which owns a stake in 
China's Tencent  0700.HK , tumbled 10.4%, reflecting worries
over regulation.  urn:newsml:reuters.com:*:nL2N2VE053  urn:newsml:reuters.com:*:nL2N2VH0EJ
    French power utility EDF  EDF.PA  slipped 0.1% after it
warned on its 2022 profit outlook, while shares of Italian
energy group Eni  ENI.MI  dropped 0.4% on the company's
agreement to sell a 49% stake in power generation unit Enipower
to U.S. investment firm Sixth Street.  urn:newsml:reuters.com:*:nL5N2VH0YR  urn:newsml:reuters.com:*:nL2N2VH117

 (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru
Editing by Sriraj Kalluvila and Matthew Lewis)
 ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961
144 3740; Twitter: https://twitter.com/s_shreyashi;))