(Reuters) – European stocks fell from historic highs on Monday as investors posted profits ahead of the quarterly corporate earnings season, while two French utilities surged after the announcement of a merger deal after months of wrangling.
Shares of Veolia and Suez jumped 9.7% and 7.7% after waste and water companies agreed to a merger deal worth nearly $ 13 billion euros ($ 15.4 billion).
The pan-European benchmark STOXX 600 ended around 0.5% lower after closing at a record high on Friday, with tech, travel and leisure and commodities stocks leading declines.
Major Wall Street indexes also edged down as investors waited for economic data and the start of the US corporate earnings season that could justify sky-high valuations. [MKTS/GLOB]
European profits will kick into high gear later in April, with analysts forecasting a 47.4% increase in first-quarter profits for STOXX 600 companies, according to data from Refinitiv IBES. Much of the support will likely come from consumer cyclics and industrial companies.
The UK’s domestically focused FTSE mid 250 index fell 0.4% to just below a record low as shops, pubs, gyms and hairdressers reopened after three months of lockdown.
“In the UK, the rapid roll-out of vaccines and the sharp drop in infections are clearly reassuring,” said Rupert Thompson, chief investment officer at Kingswood in London.
“Even so, the speed of the coming recovery remains uncertain.”
Bets on a global economic rebound, fueled by heaps of stimulus, helped the STOXX 600 finally return to its pre-pandemic highs last week, with its recovery hampered by slow vaccine distributions and a new wave of infections. on the continent.
The US benchmark S&P 500 had offset all its losses caused by coronaviruses last August.
Low-cost airlines easyJet and Ryanair fell 3.9% and 3.6% after HSBC downgraded shares to “contain” concerns about a return in demand as the economy reopens.
Italian diagnostic group DiaSorin SpA jumped 9.6% after announcing it would acquire US company Luminex Corp for $ 1.8 billion.
Economically sensitive automakers have been the best performers among European stock sectors.
Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Edited by Shounak Dasgupta and Hugh Lawson