Top Stories
European shares gain on boost from Kering; UK stocks shine
Global Banking & Finance Review®
Company
By Amruta Khandekar
(Reuters) -European shares rose on Wednesday on a boost from shares of Kering after top management changes at the luxury group, while London stocks firmed following data which showed a faster-than-expected slowdown in British inflation.
The pan-European STOXX 600 index was up 0.2% by 0817 GMT, extending gains to the second straight session.
Kering jumped 5.9% after the French luxury goods group on Tuesday named managing director Jean-Francois Palus as Gucci’s new CEO and president for a transitional period, with incumbent Marco Bizzarri to leave on Sept. 23.
Boosting sentiment further, data showed British inflation fell by more than expected in June and was its slowest in more than a year.
London’s export-oriented FTSE 100 index advanced 1.1% as the pound slipped following the inflation data, which also sparked a rally in rate-sensitive property stocks in the UK.
The moves also pushed Europe’s real estate index up 3.1%, making it the top sectoral gainer.
However, Europe’s mining sector dropped 1.5%, pressured by a 2% drop in shares of Antofagasta after the Chilean miner lowered its full-year copper output forecast.
Overall, second quarter earnings for STOXX 600 companies are expected to fall 9.2% from the previous year, according to Refinitiv IBES data.
“In Europe, positive earnings have been a tailwind to the broader equity markets so far this year and that’s something we struggle to see persisting through the back half of the year,” said Laura Cooper, senior macro strategist for iShares EMEA at BlackRock.
“We’re tilting away from luxury stocks and we like cyclicals where the earnings damage is already priced in like the energy sector.”
While focus has shifted to earnings, investors are also watching out for signals from policymakers to assess whether major central banks could halt rate hikes soon, following recent evidence of slowing inflation in the United States.
Traders have pared back rate hike expectations from the ECB after governing council member Klaas Knot on Tuesday said further increases beyond July were “by no means a certainty”.
Among other firms reporting earnings, Wacker Chemie slipped 2.1% after the German chemicals maker on Tuesday cut its 2023 outlook, while shares of ASML Holding gave up most of their early gains driven by the chip equipment maker’s upbeat forecast.
(Reporting by Amruta Khandekar; Editing by Varun H K)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage increase.
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, based on market capitalization.
The STOXX 600 is a stock index that includes 600 of the largest companies across 17 European countries, providing a broad representation of the European equity market.
Central banks are national financial institutions that manage a country's currency, money supply, and interest rates, often overseeing monetary policy and financial stability.
Explore more articles in the Top Stories category
