European Markets Close On Strong Note As Stocks Rally On Bargain Hunting
(RTTNews) – European stocks closed on a strong note on Tuesday, rebounding smartly after suffering sharp losses in the previous session amid worries about Chinese real estate major Evergrande’s debt woes.
Investors shrugged off concerns about Evergrande’s woes and indulged in some bargain hunting and looked ahead to the monetary policy announcements from the Federal Reserve and the Bank of England.
While the Fed is set to announced its policy on Wednesday, the ECB is scheduled to announce its policy on Thursday.
The Fed is widely expected to leave monetary policy unchanged but could address the outlook for its asset purchase program. The minutes of the Fed’s last meeting signaled the central bank was prepared to begin scaling back asset purchases by the end of the year.
With some recent disappointing economic data suggesting the Fed could push back its plans, traders are likely to pay close attention to the wording of the post-meeting statement.
Markets reacted positively to the OECD’s economic outlook report showing the Euro Area economy will likely grow 5.3% this year. The earlier projection was for a 4.3% expansion.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal and Spain ended higher.
Russia and Sweden edged up marginally, while Iceland and Turkey closed weak.
In the UK market, Entain soared more than 18% on reports DraftKings had made a $20 billion takeover offer for the British online sports betting and gambling firm. Entain’s board confirmed in a filing with the London Stock Exchange that it received a proposal from DraftKings.
Pershing Square Holdings climbed 5%. Royal Dutch Shell, Flutter Entertainment, Rolls-Royce Holdings, Segro, IAG, Prudential, Ocado Group, IHG, Scottish Mortgage, Admiral Group, Sainsbury (J) and 3I Group gained 2 to 4%.
Kingfisher declined nearly 5% despite reporting a surge in first-half earnings. Compass Group, Antofagasta and Lloyds Banking Group also ended notably lower.
In the German market, HelloFesh gained about 4%. Merck, Siemens Healthineers, Siemens, Fresenius, Porsche Automobil, Vonovia, Allianz and SAP gained 2 to 3%. Infineon Technologies, Symrise, MTU Aero Engines, Munich RE and Henkel also rallied sharply.
In France, Saint Gobain, Teleperformance, LOreal, LVMH, Pernod Ricard, Capgemini, Air Liquide, Dassault Systemes, Hermes International, Air France-KLM, Essilor, Vinci and STMicroElectronics gained 1.5 to 3%.
Atos, Faurecia, ArcelorMittal, Technip, Sodexo and Veolia ended lower by 1 to 2.3%.
Universal Music Group’s shares soared this morning, as owner Vivendi spun off the record label in the biggest European listing of the year.
In economic news, the UK budget posted its second highest deficit on record for the month of August, data published by the Office for National Statistics showed.
Public sector net borrowing, excluding public sector banks, totaled GBP 20.5 billion in August 2021. This was the second-highest August borrowing since monthly records began in 1993. Nonetheless, this was GBP 5.5 billion less than in August 2020.
UK manufacturing orders grew the most on record in September, with the order book balance rising to 22% in the month from 18% in August, survey data published by the Confederation of British Industry showed on Tuesday.
This was the strongest growth in orders since April 1977.
At the same time, the export order book balance advanced to -2%, the highest since March 2019, from -16% in August.
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