EUROPEAN shares advanced on Wednesday amid broad-based gains and upbeat corporate updates while investors digested more comments from US Federal Reserve Chair Jerome Powell’s second day of testimony.
The pan-European Stoxx 600 gained 0.9 per cent, buoyed by a 2.1 per cent rise in real estate shares.
French stocks were also up nearly 0.9 per cent after falling in the previous session, as markets assessed the turbulent political situation following Sunday’s legislative election.
Supporting equities, yield on government bonds across the euro zone fell in a sign of investors unwinding the political risk premium they had attached to the countries before the France’s parliamentary runoff vote.
Meanwhile, Powell said on his second day of congressional testimony he was not ready to conclude that inflation is moving sustainably down to 2 per cent though he had “some confidence of that”.
Markets are now awaiting June inflation data out of the US and Germany due on Thursday to gauge the timing of potential interest rate cuts.
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Focus is also on quarterly earnings in the region. Deutsche Bank analysts said in a note: “We expect both earnings and sales to have increased slightly in Q2, marking the first positive y-o-y growth rate since Q1 2023.”
Norwegian aerospace and defence company Kongsberg Gruppen climbed 11 per cent to the top of the benchmark index after reporting strong revenue growth, improved margins and a growing order backlog in the second quarter.
On the other hand, UK’s Barratt Developments slipped 1.2 per cent as the homebuilder forecast a fall of up to 7 per cent in its home-building targets for fiscal year 2025, citing high mortgage rates and broader economic concerns.
“Higher interest rates have caused the UK housing market to stall over the last couple of years, and although mortgage demand looks to be gradually picking up, the ambitious targets set by the new government could be exactly what is required to get the market moving,” said Mark Crouch, analyst at investment platform eToro.
Online takeaway food firm Delivery Hero jumped 9.2 per cent after delivery app Baemin, backed by the German group, said it would raise its commission fee for South Korean restaurants.
Travis Perkins gained 7.1 per cent after the British construction materials firm named Pete Redfern as its new CEO, succeeding Nick Roberts who will step down on Sept 16 after five years at the helm.
Enagas rose 6.2 per cent after the Spanish grid operator agreed to sell its 30.2 per cent stake in Tallgrass Energy to US fund Blackstone for US$1.1 billion. REUTERS
