By Anisha Sircar
-European stocks rose on Friday to trade near six-week highs as a surprise interest payment by debt-ridden China Evergrande Group lifted the mood, while a surge in technology stocks and strong earnings from France’s L’Oreal provided further support.
The STOXX 600 added 0.5% and was on course to post its third consecutive week of gains as it tracked its Asian peers, which climbed on news that the Chinese property developer had made a bond payment to avert a default.
Among sectors, European personal and household goods as well as tech rose 1.6% and 1.3%, respectively, and were on the list of top gainers.
France’s blue-chip CAC 40 rose 1.1% and outperformed its European peers, riding on a 6.5% surge in L’Oreal shares following the cosmetics company’s strong results.
Shares in Dutch semiconductor equipment maker ASML and German software firm SAP rose around 2% each after stumbling earlier this week following their results.
“We’ve lots of earnings beats on lowered expectations, and then you’re getting comments from CEOs suggesting supply chains are damaged – but certain firms have said that they’re on top of it,” said Keith Temperton, sales trader at Forte Securities. “That’s hopeful for the markets.”
A bunch of upbeat earnings lifted Wall Street’s S&P 500 to a record high on Thursday, while its European counterpart is less than 1% shy of its August peak.
Europe Inc is expected to see a 47.6% rise in third-quarter profit to 96.1 billion euros ($112 billion), latest data from Refinitiv I/B/E/S showed, a slight improvement from last week’s 46.7% growth forecast.
Investors appeared to look past a survey that showed growth in euro zone business activity slowed in October as firms face soaring costs due to supply-chain constraints, while the bloc’s dominant service industry struggled amid ongoing COVID-19 concerns.
Euro zone inflation expectations hit their highest levels in years, putting additional pressure on the European Central Bank on its insistence on maintaining crisis-era stimulus. The central bank is set to meet next week. [GVD/EUR]
“The transitory nature of inflation is becoming stickier … but things are being discounted,” Temperton added.
France’s Renault slipped 1.8% after the carmaker said its production losses this year would be far larger than previously forecast owing to the global chip shortage.
Swedish mining firm Boliden also took a 4.9% dip as its third-quarter operating profit fell below market forecasts, pressured by higher costs and lower volumes.