Despite concerns about rising inflation and speculation that the Fed might begin tightening its monetary policy sooner than expected, European markets closed higher on Wednesday as traders picked up stocks after sharp losses in the previous session.
Comments from Federal Reserve Vice Chair Richard Clarida that the bank’s view on its accommodative policy has not changed despite higher inflation.
The pan European Stoxx 600 ended 0.3% up. The U.K.’s FTSE 100 climbed 0.82%, Germany’s DAX moved up 0.2% and France’s CAC 40 advanced 0.19%, while Switzerland’s SMI surged up 0.41%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Iceland, Portugal, Spain, Sweden and Ukraine closed higher. Finland and Russia edged up marginally. Greece, Ireland, Netherlands, Norway, Poland and Turkey ended weak.
In the UK market, Diageo gained 3.4% after the company said it has restarted its capital return program and added that it expects to report organic operating growth of at least 14% in fiscal 2021.
BP and Royal Dutch Shell gained 3.5% and 3.3%, respectively. Pearson, Sainsbury (J), Hargreaves Lansdown, AstraZeneca, Spirax-Sarco Engineering, M&G, Imperial Brands, British American Tobacco, Tesco, Coca-Cola, Melrose Industries, Glencore and Ashtead Group ended stronger by 1.5 to 2.3%.
Just Eat Takeaway tumbled more than 8% after rival food delivery firm Delivery Hero SE announced plans to re-enter its home market of Germany next month.
Flutter Entertainment ended 4.4% down and Renishaw closed 3.45% down, while Aveva Group, Entain, Admiral Group, Compass Group and British Land Company shed 1.2 to 1.8%.
In the French market, Technip shares climbed nearly 4%. Total, Societe Generale, Carrefour, Credit Agricole, Vinci, Danone, Orange, BNP Paribas and Veolia gained 1.2 to 2.6%.
Unibail Rodamco ended more than 4% down. Atos, Vivendi, Renault, STMicroElectronics, Valeo and Dassault Systemes shed 1.4 to 2.4%.
In Germany, Bayer soared more than 7% as the company backed its outlook for the year after reporting a rise in quarterly net profit.
Shares of lender Commerzbank rose sharply after it swung to a first quarter profit, beating expectations.
Deutsche Telekom shares gained about 2.3% after the company raised its profit guidance for 2021 after a strong showing by its businesses in the United States and Europe in the first quarter.
Fresenius, Deutsche Bank, Fresenius Medical Care, Allianz and Adidas gained 1 to 4%, while Infineon Technologies, Merck, Thyssenkrupp, Lufthansa and Volkswagen ended sharply lower.
In the Irish market, shares of UDG Healthcare zoomed nearly 21% after the company announced it would be bought by private equity firm Clayton, Dubilier & Rice for $3.7 billion.
In economic news, Euro area industrial production increased in March after falling in the previous month, led by growth in all categories, preliminary data from Eurostat showed.
Industrial production rose 10.9% year-on-year after a 1.8% fall in the previous month, which was revised from 1.6%. Economists had forecast an 11.6% increase.
Compared to the previous month, industrial production edged up 0.1% in March following a 1.2% fall in February, revised from 1%. Economists had forecast 0.7% increase.
Final data from the statistical office Insee showed French inflation reached a 14-month high in April, rising 1.2%, but the rate was below the initial estimate. Inflation was 1.1% in March. The initial estimate was 1.3%.
Germany’s consumer price inflation hit a two-year high in April, final data from Destatis confirmed. The consumer price index rose 2% year-on-year following 1.7% increase in March. The latest inflation rate was the highest since April 2019, when it was at the same level.
U.K. gross domestic product shrank 1.5% sequentially in the first quarter, reversing a 1.3% rise in the fourth quarter, the Office for National Statistics reported. Economists had forecast a sequential drop of 1.6%.
GDP grew 2.1% month-on-month in March as schools and some part of the economy reopened through the month.
Market Analysis
European Markets Close Higher On Strong Earnings, Recovery Hopes
2021-05-12 18:05:26
