European Stocks Extend Winning Streak On Optimism About Earnings, Growth

European stocks extended their winning streak as the mood remained positive on Thursday amid continued optimism about earnings and economic recovery.

Wednesday’s inflation data from the U.S. that suggested the Federal Reserve is unlikely to taper its bond buying program anytime soon continued to aid sentiment.

Worries about the rapidly spreading delta variant of the coronavirus and the resultant restrictions on travels in several places weighed and limited markets‘ upside. Still, several benchmarks in the region recorded their multi-month highs.

The pan European Stoxx 600 edged up 0.11%. Germany’s DAX climbed 0.7% and France’s CAC 40 gained 0.36%, while the U.K.’s FTSE 100 ended 0.37% down. Switzerland’s SMI moved up 0.33%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Iceland, Norway, Poland, Portugal, Russia and Sweden closed higher.

Belgium, Denmark and Spain edged up marginally. Finland and Netherlands closed flat, while Greece and Ireland ended weak.

In the UK market, Aviva climbed 3.5%. Smiths Group, Hargreaves Lansdown, Ferguson, AstraZeneca, Ashtead Group, B&M, Hikma Pharmaceuticals and Tesco gained 1 to 2.3%.

Rio Tinto and Evraz shed 7.6% and 7.1%, respectively. M&G, Just Eat Takeaway, Legal & General, IHG, Royal Dutch Shell, Rolls-Royce Holdings, Coca-Cola HBC, Antofagasta, BP and IAG declined 1.5 to 3%. BHP Group, Barclays Group and Whitbread also ended notably lower.

In the French market, Faurecia surged up 3.7%. Accor gained about 2.5%, while LOreal and Valeo moved up 1.5% and 1.1%, respectively.

In Germany, Deutsche Telekom, Thyssenkrupp, Merck, Deutsche Post, SAP, Munich RE, Bayer, BASF, Fresenius and Daimler gained 1 to 3%. Henkel and RWE ended notably lower.

Delivery Hero tumbled more than 7%. The online food ordering company raised its gross merchandise value outlook for the full year after delivering strong performance in the second quarter.

Shares of Dutch insurer Aegon NV advanced more than 7% after the company reported better than expected results for the second quarter.

In the Swiss market, Zurich Insurance Group AG gained nearly 4% after the company’s first-half business operating profit jumped 60%, beating expectations.

In economic releases, Eurozone industrial production declined at a slower pace in June, data published by Eurostat showed.

Industrial output was down 0.3% month-on-month, slower than the 1.1% decrease seen in May. This was the second consecutive fall. Economists had forecast a monthly drop of 0.2%.

On a yearly basis, industrial production growth eased to 9.7% in June from 20.6% in May.

The U.K. economy recovered strongly in the second quarter, following the easing of coronavirus restrictions, the first quarterly estimates from the Office for National Statistics revealed.

Gross domestic product grew 4.8% sequentially in the second quarter, reversing a 1.6% fall in the first quarter. The rate matched economists’ expectations. Nonetheless, the level of GDP was 4.4% below its pre-pandemic level.

Another report from the ONS showed that the visible trade gap widened to GBP 11.98 billion in June from GBP 9.6 billion in May.

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