European stocks end at post-Brexit high; DAX enters bull-market territory

European stocks traded higher on Tuesday, with the benchmark index rallying to a post-Brexit high and German’s DAX 30 entering bull-market territory, after a round of upbeat earnings lifted sentiment.

The Stoxx Europe 600 picked up 0.9% to end at 344.67, its highest close since June 23. A gain on Tuesday marked the gauge’s fifth in a row, the longest string of gains since early July.

“Sentiment remains upbeat for global equities mainly because of the actions of central banks, rebounding oil prices and the mostly better-than-expected U.S. corporate earnings results,” said Fawad Razaqzada, market analyst at City Index, in a note.

While European indexes have felt the pull from “economic stagnation in the eurozone, troubles with Italian banks, concerns about Brexit, a rapid rise in terrorist threats and so on…the markets here have started to rise a little more…in recent days,” with the U.K.’s running higher after the Bank of England unveiled an aggressive monetary easing program, he said.

The U.K’s FTSE 100 UKX, +0.62% rose 0.6% to 6,851.30.

Meanwhile, Germany’s DAX 30 rallied by 2.5% to close at 10,692.90, pushing it into bull-market territory, according to Dow Jones data. A bull market is typically defined as a rise of at least 20% from a recent low. The DAX hit its 2016 closing low of 8,752.87 on Feb. 11.

The DAX “appears to be finally coming out of its consolidation range…the index has broken above prior resistance at 10,475 after spending several months below this level,” said Razaqzada.

Topping the DAX, shares of Munich Re AG climbed 5.7% after the reinsurer’s quarterly net profit of €974 million ($1.08 billion) outstripped expectations of €556 million in a Wall Street Journal poll of analysts.

Energy boost: Oil-and-gas shares on Tuesday were among best performing. On Monday, crude futures rallied after the Organization of the Petroleum Exporting Countries said will hold an “informal” meeting in late September. Oil prices were little changed on Tuesday.

Shares of Amec Foster Wheeler PLC jumped by about 12% after the energy-services and equipment firm held to full-year earnings expectations, even as it swung to an interim first-half pretax loss.

Telecoms risers: At the top of the Stoxx 600, Altice NV shares rallied 15% after the telecommunications company said core earnings rose 2.7% in the second quarter. It said growth in the U.S. and Portugal offset a slowdown in France.

But French telecommunications company SFR Group SA said it is seeing signs of a better pricing environment in the mobile market in France. Its shares surged 9.4%.

Other movers: Legal & General Group PLC posted a 9.6% rise in first-half adjusted-operating profit, but the report also contained a £48 million ($62 million) decline in insurance operating profit to £138 million. Shares were down 5.6%.

William Hill PLC shares rose by 0.5% following a Financial Times report that 888 Holdings PLC and Rank Group PLC have put in a buyout offer of £3.6 billion.

Pandora A/S shares fell 4.2% after the Danish jeweler’s quarterly profit and sales came in below expectations. Sales rose 20% to 4.33 billion kroner, but missed the FactSet consensus of 4.52 billion kroner. The company did back its full-year sales view and said the Brexit vote didn’t hurt U.K. sales.

Randstad Holding NV climbed 0.8%. The Dutch staffing provider said it plans to buy Monster Worldwide Inc. in a deal worth about $429 million.

Indexes: France’s CAC 40 rose 1.2% to 4,468.07 and Italy’s FTSE MIB picked up 0.3% at 16,796.14.

Spain’s IBEX 35 tacked on 1.2% to 8,665.40.

The euro traded at $1.111, up from $1.1082 late Monday.

The pound fell to $1.2974, compared with $1.3037 late Monday in New York, after the release of June U.K. industrial and trade data.

As well, Bank of England policy maker Ian McCafferty in the Times of London newspaper said BOE monetary easing could be expanded if U.K. economic data were to worsen.

Source: MarketWatch

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