European stocks hit record high thanks to boost from Airbus, Bayer hurt by Roundup decision
By Ambar Warrick and Shreyashi Sanyal
(Reuters) – European stocks closed at an all-time high on Thursday, boosted by Airbus after the plane maker raised production targets for jets, while German stocks weakened after the manufacturer’s shares of Bayer pharmaceuticals have been hit by a court ruling.
The pan-European STOXX 600 index rose 0.3% to 446.44 points, a record high at the close.
French aircraft maker Airbus has jumped 9.2% after setting ambitious targets to expand production of airliners as the airline industry recovers from the COVID-19 pandemic.
German stocks lost around 0.3%, trailing other regional markets, with Bayer being the DAX’s biggest drag, falling 5.0%.
The action marked its worst day in three months after a U.S. judge rejected his collective action plan to settle future claims related to his Roundup and other glyphosate-based weedkillers.
European stocks were little moved this week, but reached record highs as continued assertions of loose monetary policy and waning inflation concerns painted a favorable picture.
However, investors have turned to more cyclical segments of the equity markets to hedge against the risks of rising inflation.
The European banking sector has nearly 2% and basic resources jumped 3.0%, leading sector gains on Thursday.
A rise in metal prices, amid concerns over supply disruptions in Chile’s largest copper producer, also helped mining stocks outperform. [MET/L]
“We continue to expect a rapid recovery which was also reflected in the strong performance of European and German companies during the first quarter earnings season,” said Mark Haefele, investment director of wealth management global at UBS in a client note.
“We recommend that investors continue to position themselves for the reflation exchange and favor cyclicals of reasonable value that benefit from rising inflation and higher bond yields.”
Food and beverage inventories were among the worst performers, falling 0.7% on losses at UK processed food maker Tate & Lyle. The stock lost more than 6% after its annual turnover fell.
Among other players, Deutsche Bank rose 1% after chief executive Christian Sewing told shareholders the bank’s multi-year overhaul was ahead of expectations and remained its primary focus, promising an era of more sustainable earnings. .
Puma fell 0.6% after French luxury goods group Kering said it would sell a 5.9% stake in the German sportswear company through a stock offering.
(Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur, Alexander Smith and Toby Chopra)