European stocks recover early losses on positive earnings

On Wednesday European stocks recovered from early losses as expectations of positive earnings from German software group SAP and strong quarterly sales for French luxury goods maker LVMH helped ease concerns about inflation.

By 0824 GMT, the pan-European STOXX 600 index gained 0.2% after shedding 0.4% in opening trade. The German DAX rose 0.6% and France’s CAC 40 was stable, while UK’s FTSE 100 lost 0.4%.

SAP gained 4.5% after it increased its full-year outlook for a third time following a positive quarterly showing as more customers shift their IT operations to the cloud.

French luxury goods maker LVMH gained 1.5% as sales at its fashion and leather goods division rose strongly in the third quarter but overall revenue growth in Asia and the United States decreased after a stellar first-half performance.

Helping sentiment on Wednesday was data that showed China’s export growth unexpectedly accelerated in September.

Worries about central banks withdrawing their pandemic-era stimulus, a global energy crisis and signs of higher prices have all dulled the outlook for economic recovery, keeping the STOXX 600 nearly flat on the month after shedding 3.4% in September.

The International Monetary Fund on Tuesday lowered its 2021 global growth forecast to 5.9% from 6.0%, but left a 2022 forecast unchanged at 4.9%.

Third-quarter profit for STOXX 600 companies is seen gaining 46.7%, as per Refinitiv IBES data, after a 152.6% in the previous quarter, with energy and industrial companies driving the biggest gains.

Meanwhile, investors will be following U.S. inflation data due later in the day for clues on the Federal Reserve’s monetary policy outlook.

Online food ordering and delivery service Just Eat Takeaway.com lost most ground on the STOXX 600, dropping 4.2%, after its third-quarter orders fell short of analysts’ estimates.

Apple Inc suppliers including STMicroelectronics and AMS were negative after Bloomberg reported that iPhone 13 production is likely to be reduced.

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.