Blue-chip earnings, travel stocks boost European shares (updated)
21/07/2021 09:43
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* ASML nears record high after results
* STOXX 600 Q2 profit seen rising 115%
* SAP slips despite forecast lift
(Updates to close)
By Sruthi Shankar
July 21 (Reuters) - A slew of upbeat updates from European
blue-chip firms helped the region's benchmark index posts its
best session in 11 weeks on Wednesday and further recover from
Monday's sharp losses, while travel stocks roared back after
weeks of declines.
The pan-European STOXX 600 index .STOXX rose 1.7%,
extending Tuesday's small gains. Travel and leisure stocks
.SXTP jumped 3.7% after getting hammered recently by worries
about a resurgence in COVID-19 cases.
Dutch semiconductor equipment maker ASML Holding ASML.AS
rose 3.1% and neared all-time highs after it raised its 2021
sales outlook and announced a new share buyback plan.
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Shares in peers ASM ASMI.AS and BE Semiconductor BESI.AS
rose about 3% each.
Leading the STOXX 600 risers was Swedish transportation
equipment maker Thule THULE.ST after a second-quarter beat,
while British fashion retailer Next NXT.L jumped 7.5% on
lifting its profit forecast. urn:newsml:reuters.com:*:nL8N2OX1JG urn:newsml:reuters.com:*:nL8N2OX22Y
A rise in hammered bond yields helped banks .SX7P post
their best session in more than four months. GVD/EUR
Investors expect the European Central Bank to stick to a
dovish tone at its policy meeting on Thursday, with investors
looking for clues on what to expect in the September meeting.
Earlier this month, it had unveiled a new strategy where it will
tolerate higher inflation by targeting 2% inflation.
"The ECB dovish bias would suggest that the total reduction
of the monthly purchases in 2022 will be less than previously
expected," said strategists at ING.
European companies listed on the STOXX 600 are expected to
post a 115.2% jump in second-quarter profit versus a year ago,
as per Refinitiv IBES data. While forecast for profit growth has
consistently risen, many expect growth rate to peak in the
second quarter.
The upbeat earnings reports helped investors look past
worries about cooling global growth as many parts of Asia,
Europe and the United States grappled with surging cases of the
Delta variant.
"In the case of the likes of the UK and U.S. where
vaccination levels are much higher, markets are banking that the
vaccine wall holds back the virus enough not to overwhelm the
respective healthcare systems of both countries," said Michael
Hewson, chief market analyst at CMC Markets.
Europe's most valuable tech company, SAP SAPG.DE , dropped
3.2%, with investors disappointed that revenue and profit
outlook had not been lifted further. Swiss drugmaker Novartis
NOVN.S fell 0.7% despite second-quarter core net income beat.
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STOXX 600 on pace to recover from Monday's rout https://tmsnrt.rs/3kENiYp
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(Reporting by Sruthi Shankar and Susan Mathew in Bengaluru;
Editing by Arun Koyyur and Pravin Char)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6182 2787;))