European stocks reach week-high levels
European stocks reached their highest levels in over a week on Tuesday, driven by a 0.9 per cent surge in healthcare stocks and a 1.8 per cent increase in the technology sector.
This rise was fueled by positive corporate earnings, pushing the pan-European STOXX 600 index up by 0.6 per cent as of 0838 GMT. Meanwhile, the UK’s FTSE 100 Index also hit an all-time peak.
Swiss drugmaker Novartis contributed to the healthcare sector’s rise with a 4.8 per cent gain after it raised its full-year outlook following first-quarter results that exceeded expectations.
The technology sector saw a boost from German company SAP, which reported a 24 per cent increase in first-quarter cloud revenue, reaching 3.93 billion euros ($4.19 billion).
However, Randstad, the world’s largest employment agency, reported disappointing quarterly core earnings, leading to a 6.2 per cent drop in the Dutch firm’s shares.
Fiona Cincotta, a senior market analyst at City Index, commented on the mixed earnings season, noting that an improving economic recovery and lower interest rate expectations are driving optimism.
Business activity in the eurozone expanded at its fastest pace in nearly a year this month, thanks to a strong recovery in the service industry. Equities have been recovering steadily from a low point over a month ago, buoyed by positive corporate reports and hopes of imminent interest rates.
However, LSEG data showed last week that first-quarter earnings are expected to decrease by 12.1 per cent from a year ago.
In other news, Telecom Italia’s shares rose by 4.3 per cent, topping the Italian main index, after CEO Pietro Labriola seemed likely to secure a second term. Leading investor Vivendi chose to abstain in a shareholder vote on renewing the board of the former phone monopoly.
On the other hand, DNB, Norway’s largest bank, saw a 3.6 per cent drop in its shares. This drop weighed on Oslo’s all-share index after the bank fell short of quarterly net interest income expectations.
Finally, the UK’s exporter-focused FTSE 100 rose by 0.2 per cent after reaching an all-time intraday high of 8,075.52 points earlier in the day. JD Sports Fashion was among the top gainers after it proposed to buy American athletic fashion retailer Hibbett Inc. for about $1.08 billion.
