Banks, chipmaker Infineon help European stocks tackle global gloom


(Reuters) – European stocks rose on Tuesday, as surging bank stocks and a positive earnings update from German chipmaker Infineon calmed nerves following a tech-fueled sell off at Wall Street.

The DAX chart of the German stock index is pictured on the stock exchange in Frankfurt, Germany on September 29, 2021. REUTERS / Staff

The pan-European STOXX 600 index gained 0.4% after closing at its lowest level since July 21 in the previous session.

Asian stocks fell to their lowest level in nearly a year amid concerns over slowing growth and rising inflation, after a weak end of the day on Wall Street that saw a sell off in Big Tech and other growth stocks. [MKTS/GLOB]

In Europe, bank stocks rose 1.4% to generate sector gains as optimism about economic reopenings and expectations of a tighter monetary policy pushed bond yields higher. [GVD/EU]

Italy’s Unicredit, France’s Crédit Agricole and Britain’s Lloyds Banking Group rose 2.2% to 3.3% after the US banking index hit a record high on Monday.

“Rate-sensitive bank stocks are getting a boost as investors begin to seriously assess rate hikes,” said Danni Hewson, financial analyst at AJ Bell.

“But there are big questions about how the economy is really rebounding, and cost pressures are wreaking havoc on businesses and consumers,” Hewson said.

Business growth in the euro area slowed in September as supply issues limited activity, while high inflationary pressures weighed on demand, according to the IHS Markit survey.

Investors are now awaiting US employment data on Friday for signs of the Federal Reserve’s declining asset purchase schedule.

Automakers slipped 0.2% after data showed UK new car registrations fell 35% last month, the weakest September in at least 23 years.

Infineon Technologies gained 1.6% after confirming revenue for 2021 and said it expects results to rise further next year as demand for power chips for cars, data centers and renewable energy production is skyrocketing.

Dutch tech investor Prosus rose 2% after obtaining regulatory approval to increase its stake in German food delivery company Delivery Hero.

British bakery and fast food chain Greggs climbed 3.8% after raising its full-year profit outlook despite staff and supply chain issues.

German leasing company Grenke fell 11.6% after narrowing its forecast range for the full year, citing bottlenecks in global supply.

Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Edited by Sriraj Kalluvila and Ramakrishnan M.


About Author

Leave A Reply