European Stock Markets
European shares gained further ground on Tuesday, rising to new 2 1/2
year highs thanks to strong industrials and banking stocks, and indebted
telecoms group Altice surged on plans to spin off its U.S. business.
The pan-European STOXX 600 index gained 0.4 percent to 399.89 points, its highest since August 2015 and edging closer to an all-time high of 414.06 points. Euro zone stocks .STOXXE rose 0.4 percent.
European equities have had a very strong start to the year, triggering some concerns over valuations becoming too high. The European market temperature is “very hot versus a year ago”, UBS strategists wrote.
The Swiss bank found the bull-bear indicator jumped 84 percent in a year and cyclicals beat by 8 percent - but concluded the European market still offered catch-up potential as it lags the U.S. cycle.
Investors were also closely watching valuations ahead of the earnings season.
The cyclical engine of a new year’s rally which has sent European stocks to multi-year highs rumbled on, with industrials cementing market gains.
Germany’s Siemens (SIEGn.DE) led the way, rising 0.6 percent after the country’s industrial production and exports rose more than expected in November.
Commodities also continued their climb, with stronger metals prices helping the STOXX 600 materials index .SXPP rise 0.9 percent to hit its highest since March 2012, topping the sector leaderboard.
Telecoms and cable group Altice (ATCA.AS) stole the spotlight, jumping 8.0 percent as investors welcomed a decision to spin off its U.S. unit and simplifying the group’s structure in the process.
Traders said any move to reduce debt would be well received by the market, and analysts at brokerage Raymond James said the move could also make the Altice European arm a possible acquisition target for rival French telecoms companies.
Financials provided the biggest boost to the STOXX as optimism over Europe’s economic growth prevailed.
BNP Paribas (BNPP.PA) was among the best-performing banks, gaining 0.5 percent.
A French official said the bank was close to setting up a joint venture with a Chinese partner in the consumer credit sector, as President Emmanuel Macron entered the second leg of a three-day state visit to China.
Germany-listed shares in South African retailer Steinhoff (SNHG.DE) (SRRJ.J) fell 5.5 percent after the ECB sold its Steinhoff bond at a loss as the company grapples with an accounting scandal.
UK retailers Morrisons (MRW.L) and Marks & Spencer (MKS.L), however, were among top gainers after Morrisons reported a stronger than expected Christmas trading season.
The pan-European STOXX 600 index gained 0.4 percent to 399.89 points, its highest since August 2015 and edging closer to an all-time high of 414.06 points. Euro zone stocks .STOXXE rose 0.4 percent.
European equities have had a very strong start to the year, triggering some concerns over valuations becoming too high. The European market temperature is “very hot versus a year ago”, UBS strategists wrote.
The Swiss bank found the bull-bear indicator jumped 84 percent in a year and cyclicals beat by 8 percent - but concluded the European market still offered catch-up potential as it lags the U.S. cycle.
Investors were also closely watching valuations ahead of the earnings season.
The cyclical engine of a new year’s rally which has sent European stocks to multi-year highs rumbled on, with industrials cementing market gains.
Germany’s Siemens (SIEGn.DE) led the way, rising 0.6 percent after the country’s industrial production and exports rose more than expected in November.
Commodities also continued their climb, with stronger metals prices helping the STOXX 600 materials index .SXPP rise 0.9 percent to hit its highest since March 2012, topping the sector leaderboard.
Telecoms and cable group Altice (ATCA.AS) stole the spotlight, jumping 8.0 percent as investors welcomed a decision to spin off its U.S. unit and simplifying the group’s structure in the process.
Traders said any move to reduce debt would be well received by the market, and analysts at brokerage Raymond James said the move could also make the Altice European arm a possible acquisition target for rival French telecoms companies.
Financials provided the biggest boost to the STOXX as optimism over Europe’s economic growth prevailed.
BNP Paribas (BNPP.PA) was among the best-performing banks, gaining 0.5 percent.
A French official said the bank was close to setting up a joint venture with a Chinese partner in the consumer credit sector, as President Emmanuel Macron entered the second leg of a three-day state visit to China.
Germany-listed shares in South African retailer Steinhoff (SNHG.DE) (SRRJ.J) fell 5.5 percent after the ECB sold its Steinhoff bond at a loss as the company grapples with an accounting scandal.
UK retailers Morrisons (MRW.L) and Marks & Spencer (MKS.L), however, were among top gainers after Morrisons reported a stronger than expected Christmas trading season.
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