European shares extend recovery rally as oil stocks lead
Published Jul 10, 2018 10:04
European shares extend recovery rally as oil stocks lead
By Helen Reid
LONDON (Reuters) - European shares edged higher on Tuesday as investors shifted from worrying about a trade war to focussing on a corporate earnings season expected to deliver solid results.
The pan-European STOXX 600 (STOXX) index rose 0.2 percent by 0830 GMT, a 2 1/2-week high, and headed for its sixth straight day of gains as commodities shares supported the market in the face of rising protectionism.
Britain's FTSE 100 (FTSE) declined 0.1 percent, however, as the pound recovered from Monday's drop after top-level government resignations.
Fading concern over trade had pushed Wall Street and Asian stocks up overnight as well.
"It’s more of an absence of bad news rather than outright positive news that has driven the trade story over the last few days," said Edward Park, investment director at Brooks Macdonald.
Oil stocks (SXEP) were the biggest boost to the index, rising 1 percent. Crude prices climbed on concern over potential supply shortages as Norwegian oil workers prepared to strike later in the day [nL4N1U61GM].
Industrials stocks like Siemens (DE:SIEGn), Deutsche Post (DE:DPWGn) and Safran (PA:SAF), among the worst-hit by news of tariffs, also boosted the European index. Trade-sensitive luxury stocks Kering (PA:PRTP) and LVMH (PA:LVMH) extended their recovery rally.
Overall, analysts have been revising their earnings expectations higher for the STOXX 600 before Europe's earnings season kicks off in earnest. But on Tuesday disappointing results caused the most eye-catching moves.
Shares in interdealer broker TP ICAP (L:TCAPI) sank as much as 31.5 percent to a two-year low, on pace for their worst day ever. The company announced its CEO would depart and warned on profit, blaming Brexit-related costs.
Ocado (L:OCDO) shares fell 2.4 percent after the online supermarket said its 2018 pre-tax loss would exceed market consensus as investment spending cut into first-half earnings.
Among notable gainers, speciality chemicals firm Wacker Chemie (DE:WCHG) rose 2.8 percent after Societe Generale (PA:SOGN) analysts raised the stock to buy from hold.
"We think the market is overestimating the impact of renewed price pressure in polysilicon for solar and at the same time underestimating the value of Wacker's Silicones business," they wrote.
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Airbus (PA:AIR) shares rose 2.7 percent, with traders saying Bank of America (NYSE:BAC) Merrill-Lynch added the stock to its "Europe 1" list of preferred stocks.
Shares in German wind turbine maker Nordex (DE:NDXG) jumped 5.6 percent after it won its biggest single contract ever, for a 595-megawatt wind turbine order in Brazil.
Biotech and pharma shares (SXDP) rose 0.4 percent as M&A and drug trial results boosted some small caps in the sector.
UK specialist healthcare services company Cambian (L:CMBNC) soared 35 percent to the top of the small-cap index (FTSC) after saying it got a $536 million takeover offer from Caretech Holdings (L:CTH).
Switzerland-listed biotech company Cassiopea (S:SKIN) jumped 37 percent after positive trials for its Winlevi acne treatment.
Written By: Reuters
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