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European stocks hit record highs after rising for sixth day

European stocks extend gains for sixth straight day
European stocks extend gains for sixth straight day   -   Copyright  Thomson Reuters 2021
By Reuters

By Anisha Sircar and Shreyashi Sanyal

– European stocks closed at a record high on Wednesday, rising for the sixth straight session, as positive earnings reports helped overshadow worries that soaring gas prices were feeding into inflationary pressures.

The pan-European STOXX 600 rose 0.2% after better-than-expected U.S. retail sales data lifted Wall Street equities on Tuesday. [MKTS/GLOB]

Profits of companies listed on the STOXX 600 are expected to rise 60.4% in the third quarter to 103.6 billion euros ($117.2 billion) from a year earlier, latest Refinitiv data showed, a dip from last week’s 60.7% estimate.

German medical tech firm Siemens Healthineers gained 5.6% after raising synergy targets from its Varian acquisition earlier this year.

Swiss luxury firm Richemont extended its rally for a fifth day, up 0.6% to an all-time high, after a slew of price target raises by brokerages.

European stocks have eked out small gains this week to stay near record highs as strong earnings and signs of economic momentum counteract concerns around a fresh COVID-19 surge in Europe and inflation.

Data showed euro zone inflation rose to more than twice the European Central Bank’s target in October, with more than half of the jump due to a spike in energy prices.

“October’s euro-zone inflation data confirm that core price pressures are weaker than in other advanced economies,” said Jack Allen-Reynolds, senior Europe economist at Capital Economics.

“While we don’t expect services inflation to rise a lot further, high input costs will push goods inflation up in the near term.”

The price of gas next month in the Netherlands, which is considered to be a benchmark for Europe, jumped almost 8% on Wednesday to hit 101.30 euros per megawatt-hour (MWh), its highest since Oct. 18.

“The longer the shortfall of Russian flows into Northwestern Europe lasts, the longer… gas markets will have to rely on high gas prices,” said Goldman Sachs in a note.

Polish parcel locker firm InPost’s shares plunged 13.2% after lowering its full-year outlook citing slower-than-expected e-commerce market growth.

Travel and leisure stocks fell 1.7%, dragged down by Swedish online gaming company Evolution.