European Markets Close Higher As Earnings Optimism Outweigh Weak Data, Virus Concerns

European stocks closed higher on Tuesday as optimism about earnings helped offset concerns about a surge in the delta variant of the coronavirus and increased restrictions on travel.

Investors also shrugged off concerns about imminent tapering of bond buying program by the Federal Reserve.

Besides reacting to the latest batch of economic data from the region, the markets awaited U.S. inflation data, due on Wednesday, for further indications of when the world’s largest economy may start to withdraw stimulus.

Shares of travel and hospitality industry companies were under pressure.

The Pan European Stoxx 600 gained 0.35%. The U.K.’s FTSE 100 climbed 0.4%, Germany’s DAX moved up 16% and France’s CAC 40 edged up 0.1%, while Switzerland’s SMI advanced 0.41%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Russia, Spain, Sweden and Turkey closed higher.

Poland and Portugal edged up marginally, while Czech Republic and Denmark ended weak.

In the UK market, Flutter Entertainment shares zoomed nearly 8% after the company reported stronger than expected quarterly earnings.

Informa gained about 4.75%. Taylor Wimpey, Weir Group, Johnson Matthey, Evraz and Smith (DS) moved up 2 to 2.5%. Antofagasta, Royal Mail, Prudential, CRH, WPP, ITV and Entain also rose sharply.

Derwent London shares moved higher after the company said that it has bought two properties in London’s West End for 214.6 million pounds ($297.1 million) and entered into a joint venture with Lazari Investments to buy three London properties.

M&G shares declined more than 3% after the company swung to an IFRS loss after tax of £248m for the six months ended 30 June.

IAG, EasyJet and TUI AG ended weak, weighed down by concerns over a surge in coronavirus cases in many countries.

In the German market, shares of meal-kit firm HelloFresh soared more than 9% after the company said orders increased by 71.2% to 30.98 million in the second quarter, compared to 2020.

Munich Re advanced 1.7% after the German reinsurance group raised its gross premium forecasts for the full year. Fresenius Medical Care, Covestro, Merck, Beiersdorf, RWE and Thyssenkrupp gained 1 to 2%.

In the French market, ArcelorMittal gained nearly 3%. Technip and Faurecia surged up 2.8% and 2%, respectively. Valeo, Danone and Publicis Groupe also ended notably higher.

Air France-KLM, Essilor, Accor and WorldLine shed 1 to 1.7%.

In economic news, German economic confidence deteriorated more-than-expected to a ten-month low in August, survey data from the ZEW – Leibniz Centre for European Economic Research showed.

The report said the ZEW Indicator of Economic Sentiment for Germany fell to 40.4 from 63.3 in July, falling for a third consecutive month, due to a more challenging environment for the German economy. The score was forecast to drop moderately to 56.7.

Elsewhere, total U.K. retail sales grew 6.4% on a yearly basis in July while like-for-like sales were up 4.7%, the British Retail Consortium (BRC) said.

The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations, Helen Dickinson, chief executive at BRC said.