(Reuters) – A series of bullish updates from blue-chip European companies helped the region’s benchmark rise on Wednesday and recover from large losses on Monday, while travel stocks rallied roared after weeks of decline.
The pan-European STOXX 600 index rose 1.4%, extending Tuesday’s small gains. Travel and leisure stocks jumped 4.2% after being hit recently by concerns about a resurgence of virus cases.
The Dutch semiconductor equipment maker rose 3.6% and came close to all-time highs reached last week after raising its sales outlook for 2021 and announcing a new share buyback plan.
The shares of their peers ASMI and BE Semiconductor rose about 3% each.
Swiss drugmaker Novartis rose 1.8% as its second-quarter baseline net income exceeded market expectations, driven by its leading drug brands.
European companies listed on the STOXX 600 are expected to post a 115.2% jump in profits in the second quarter from a year ago, according to data from Refinitiv IBES. While earnings growth forecasts have steadily increased, many expect the growth rate to peak in the second quarter.
However, the optimistic reports have helped investors overcome concerns about slowing global growth as many parts of Asia, Europe and the United States grapple with an increase in cases of the Delta variant.
“The sharp rise in virus cases remains a real and current danger, especially for countries with immunization levels well below 50%,” said Michael Hewson, chief market analyst at CMC Markets.
“In the case of the UK and US, where immunization levels are much higher, markets believe the vaccine wall is holding the virus back enough not to overwhelm the respective health systems of both countries. “
Investors expect the European Central Bank to stick to a conciliatory tone at its policy meeting on Thursday. Earlier this month, he unveiled a new strategy by which he will tolerate higher inflation by targeting 2% inflation.
Among the declines, German enterprise software group SAP slipped 1.9% despite raising its outlook for the second time this year.
Mercedes-Benz maker Daimler AG fell 0.9% after warning that a global shortage of semiconductor chips would reduce car sales in the second half of 2021.
Chart: STOXX 600 on track to recover from Monday’s rout –
Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur