European Stock Markets
European shares touched their highest level since the start of February on Tuesday as autos and bank stocks climbed, and Italian shares recovered as the anti-establishment coalition’s government formation process stalled.
The pan-European STOXX 600 rose 0.2 percent, extending Monday's gains as carmakers rose on a cut to Chinese tariffs. Italy's FTSE MIB .FTMIB gained 0.7 percent.
Volkswagen (VOWG_p.DE), BMW (BMWG.DE) and Daimler (DAIGn.DE) were among the biggest boosts to the STOXX, up 1 to 1.6 percent, after China said it would cut the import duty on passenger cars and auto parts from July 1.
Europe’s autos sector .SXAP climbed 0.7 percent and Italy’s Fiat Chrysler (FCHA.MI) also rose 1.3 percent, helping the Italian index gain 0.6 percent.
Italian bank stocks .FTIT8300 recovered as the anti-establishment 5Star and League parties’ government plans stalled. President Sergio Mattarella sought further consultations over their proposed prime minister, a political novice. [nL5N1SS1DE]
Some investors were doubtful a coalition government would be able to go ahead with their big spending plans that have spooked markets, sending Italian bond yields to their highest in more than a year.
Competitive pressures, and hopes of dealmaking, triggered strong single-stock and sector-wide moves.
Inmarsat (ISA.L) shares dropped 8.4 percent to the bottom of the STOXX after the International Maritime Organisation authorised competitor Iridium (IRDM.O) to provide maritime safety systems, threatening Inmarsat’s monopoly in maritime distress communications.
French telecoms stocks Bouygues (BOUY.PA), Orange (ORAN.PA) and Iliad (ILD.PA) all rose after the head of the country’s telecoms regulator reignited talk of possible mergers in the sector, in comments to Le Monde newspaper.
Altice (ATCA.AS) shares also rose on investors’ hopes for M&A, and as the stock readjusted to the separation of Altice USA from Altice NV. The telecoms sector rose 0.8 percent overall.
Banks HSBC (HSBA.L), Santander (SAN.MC), BNP Paribas (BNPP.PA) and UBS (UBSG.S) were also among top drivers, benefiting from the recent rise in bond yields.
Swiss industrial machinery firm Georg Fischer (FIN.S) jumped 7.7 percent after UBS upgraded the stock to a “buy”, saying the market is underestimating the company’s margins and earnings potential, helped by its diversification in different industrial products.
Overall Europe’s earnings performance has been relatively disappointing, particularly compared with a stellar quarter in the U.S.. Bank of America Merrill Lynch said the ratio of STOXX 600 companies beating earnings targets this quarter was the worst since 2013.
The pan-European STOXX 600 rose 0.2 percent, extending Monday's gains as carmakers rose on a cut to Chinese tariffs. Italy's FTSE MIB .FTMIB gained 0.7 percent.
Volkswagen (VOWG_p.DE), BMW (BMWG.DE) and Daimler (DAIGn.DE) were among the biggest boosts to the STOXX, up 1 to 1.6 percent, after China said it would cut the import duty on passenger cars and auto parts from July 1.
Europe’s autos sector .SXAP climbed 0.7 percent and Italy’s Fiat Chrysler (FCHA.MI) also rose 1.3 percent, helping the Italian index gain 0.6 percent.
Italian bank stocks .FTIT8300 recovered as the anti-establishment 5Star and League parties’ government plans stalled. President Sergio Mattarella sought further consultations over their proposed prime minister, a political novice. [nL5N1SS1DE]
Some investors were doubtful a coalition government would be able to go ahead with their big spending plans that have spooked markets, sending Italian bond yields to their highest in more than a year.
Competitive pressures, and hopes of dealmaking, triggered strong single-stock and sector-wide moves.
Inmarsat (ISA.L) shares dropped 8.4 percent to the bottom of the STOXX after the International Maritime Organisation authorised competitor Iridium (IRDM.O) to provide maritime safety systems, threatening Inmarsat’s monopoly in maritime distress communications.
French telecoms stocks Bouygues (BOUY.PA), Orange (ORAN.PA) and Iliad (ILD.PA) all rose after the head of the country’s telecoms regulator reignited talk of possible mergers in the sector, in comments to Le Monde newspaper.
Altice (ATCA.AS) shares also rose on investors’ hopes for M&A, and as the stock readjusted to the separation of Altice USA from Altice NV. The telecoms sector rose 0.8 percent overall.
Banks HSBC (HSBA.L), Santander (SAN.MC), BNP Paribas (BNPP.PA) and UBS (UBSG.S) were also among top drivers, benefiting from the recent rise in bond yields.
Swiss industrial machinery firm Georg Fischer (FIN.S) jumped 7.7 percent after UBS upgraded the stock to a “buy”, saying the market is underestimating the company’s margins and earnings potential, helped by its diversification in different industrial products.
Overall Europe’s earnings performance has been relatively disappointing, particularly compared with a stellar quarter in the U.S.. Bank of America Merrill Lynch said the ratio of STOXX 600 companies beating earnings targets this quarter was the worst since 2013.
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