Financial and Industrial stocks push Europe higher
On Wednesday gains in financial and industrial stocks pushed up European shares, though the main equity index remained off record highs on uneasiness that the U.S. Federal Reserve could flag later in the day when it plans to start loosening its stimulus.
The pan-European STOXX 600 gained 0.2% by 0745 GMT. If gains will keep until the end of the day, the index will mark its longest gaining streak in three-and-a-half years. The benchmark index has now risen for five consecutive weeks as investors believe a steady vaccination programme would spur regional economic growth, but a recent increase in inflation has sparked worries of a sooner-than-expected tightening in global monetary policy.
After dovish signals from the European Central Bank last week, the U.S. Federal Reserve on Wednesday is anticipated to at least flag the expected start of talks about when and how to exit from crisis-era policies put in place at the beginning of the COVID-19 pandemic.
In Europe, heavyweight industrial and financial stocks rose 0.5% respectively, while energy stocks followed a leap in Brent crude to its highest since April 2019. Technology shares, however, dropped by 0.2% as SAP fell 0.9%, hit possibly by a disappointing profit forecast from U.S. software rival Oracle Corp.
London’s FTSE 100 led gains in the region even as data showed British inflation unexpectedly rose above the Bank of England’s 2.0% objective in May and looked set to gain further as the country re-opens its economy from lockdowns.
In company news, EverArc Holdings Ltd gained 8% as it said it would buy firefighting products and lubricant additives manufacturer Perimeter Solutions in a deal estimated at about $2 billion. Spanish solar power developer Solarpack appreciated by 43.3% as it revealed a takeover bid from Swedish fund EQT valued at a maximum of 881.2 million euros ($1.07 billion). EQT shares dropped by 0.6%, while the Spanish bourse was stable.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.