European stocks bounce back
European stocks bounced back on Wednesday after their worst sell-off this year as optimism about a strong earnings season countered worries about a rapid rise in COVID-19 cases in some countries.
Tech stocks were the top gainers, up 1.3%, with semiconductor equipment maker ASML jumping 4.7% after it raised its full-year sales forecast, citing strong demand amid a global computer chip shortage. Smaller rival ASM International rose 0.6% on forecasting a rise in second-quarter orders.
German fashion house Hugo Boss jumped 7.5% to a one-year high, with traders citing a media report of takeover interest in the company, including from French luxury goods maker LVMH.
The pan-European STOXX 600 index rose 0.4% after a blistering seven-week rally ran into a bout of profit-taking on Tuesday, when it fell 1.9%. Some analysts pointed to concerns over the strength of a global economic recovery after India’s mounting coronavirus crisis and a global spike in COVID-19 cases.
There were concerns about stretched valuations, with global equities trading at alltime highs and earnings expectations surging as vaccination drives and stimulus programmes support global recovery.
European earnings are expected to rise a record 61% in the first quarter of 2021, according to Refinitiv IBES data, placing Europe on course for a rare outperformance versus corporate America. The world’s second-largest brewer Heineken NV gained 3.9% after it reported better-thanexpected quarterly sales, helped by increased beer sales in Africa and Asia. French luxury goods group Kering was up 1.4% after Gucci’s revenue rebounded strongly in the first quarter.
Oil & gas stocks got a boost despite weaker oil prices, as Deutsche Bank started coverage of stocks including Royal Dutch Shell and France’s Total with a “buy” rating.
Among decliners, Italian football club Juventus slumped 12.7% after breakaway European Super League founder and Juventus chairman Andrea Agnelli said the league can no longer go ahead after six English clubs withdrew.