European stocks rose Friday to trade near six-week highs as a surprise interest payment by debt-ridden China Evergrande group boosted morale, while a sharp rise in tech stocks and strong profits from L’Oréal in France provided additional support.
The STOXX 600 added 0.5% and was set to post its third straight week of gains as it followed its Asian peers, who climbed on news that the Chinese real estate developer had made a bond payment to avoid failure. Among the sectors, European personal and household goods as well as technology increased by 1.6% and 1.3% respectively and were on the list of the main winners.
The French CAC 40 blue chip rose 1.1% and outperformed its European peers, benefiting from a 6.5% increase in L’Oréal share following the good results of the cosmetics company. Shares of Dutch semiconductor equipment maker ASML and German software company SAP rose around 2% each after stumbling earlier this week in the wake of their results.
“We have a lot of profit on lowered expectations, and then you get comments from CEOs suggesting the supply chains are damaged – but some companies have said they are on top,” said Keith Temperton, sales representative at Forte. . Securities. “It brings hope for the markets.” A spate of bullish earnings took Wall Street’s S&P 500 to an all-time high on Thursday, while its European counterpart is less than 1% from its August high.
Europe Inc is expected to post a 47.6% increase in third-quarter profit to 96.1 billion euros ($ 112 billion), according to the latest data from Refinitiv I / B / E / S, a slight improvement from compared to last week’s growth forecast of 46.7%. Investors appeared to be looking beyond a survey that showed growth in eurozone business activity slowed in October as companies faced soaring costs due to supply chain constraints. supply, while the bloc’s dominant service industry struggled with lingering concerns over COVID-19.
Eurozone inflation expectations have reached their highest levels in years, putting additional pressure on the European Central Bank which insists on maintaining stimulus measures in times of crisis. The central bank is due to meet next week. “The transient nature of inflation is getting stickier and stickier… but things are being pushed aside,” Temperton added.
France’s Renault slipped 1.8% after the automaker said its production losses this year would be much larger than expected due to the global chip shortage. Swedish mining company Boliden also fell 4.9% as its third-quarter operating profit fell below market expectations, under pressure from rising costs and falling volumes.
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