Home Economy News European shares scale new record highs on upbeat earnings

European shares scale new record highs on upbeat earnings


European shares scale new record high, retailers pop By Reuters

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Published Mar 13, 2024 04:39AM ET
Updated Mar 13, 2024 01:21PM ET

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured after jumping to a new record at the stock exchange in Frankfurt, Germany, March 13, 2024. REUTERS/Staff/File Photo

By Khushi Singh and Amruta Khandekar

(Reuters) -European shares touched new record highs on Wednesday, boosted by upbeat corporate updates from the retail and utilities sector though the advance was limited by losses in automakers.

The pan-European STOXX 600 ended up 0.2%. The index earlier in the session hit an all-time high for the fifth time in the past six sessions.

The retail index emerged as the top sectoral performer, adding 3.4% on the back of a 18.9% jump in Zalando.

The online fashion retailer forecast a return to growth this year and said it would buy back up to 100 million euros ($109 million) of shares.

Upbeat corporate updates have fostered a risk-on sentiment among European investors, reflecting confidence in the economy.

Also aiding the scorching rally in European stocks have been expectations of an interest rate cut from the Federal Reserve and the European Central Bank in June.

The start of the easing cycle could be particularly beneficial for smaller companies in Europe such as those in the industrials sector as well as small cap firms in the United Kingdom, said Helen Jewell, chief investment officer of BlackRock (NYSE:BLK) Fundamental Equities, EMEA.

“Some of them are trading at very low multiples at the moment and as long as they’ve got a real robustness to the earnings and relatively low leverage, those are the companies we think could be incredibly interesting going forward.”

Zara-owner Inditex (BME:ITX) shares hit a record high, ending up 7.7% after it reported positive early spring sales, boosted by upmarket fashions.

Shares in E.ON climbed 6.0% as Europe’s largest operator of energy networks increased its five-year investment target to 42 billion euros ($46 billion) and provided 2024 profit guidance that beat expectations.

The stock move propelled the broader utilities index up 0.8%.

Energy shares and miners gave an additional boost, tracking commodity prices higher. [O/R] [MET/L]

Keeping Germany’s DAX index under pressure, Volkswagen (ETR:VOWG_p) slipped 5.9% after forecasting a 3% rise in its car sales this year, a growth rate down sharply from 2023 amid a gloomy economic outlook.

The broader automobiles index declined 1.2%.

Vallourec shares climbed 7.4% after steelmaker ArcelorMittal (NYSE:MT) announced the acquisition of a 28.4% stake in the France-based company for around 955 million euros ($1.04 billion).

Adidas (OTC:ADDYY) posted its first loss in over 30 years in 2023. Still, its shares reversed course from early declines to close up 3.8%.

Data showed euro zone industrial production fell 3.2% in January from the previous month.

European shares scale new record high, retailers pop

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