European stocks reverse losses on strong SAP, LVMH results

imageStock Markets18 minutes ago (Oct 13, 2021 05:05AM ET)

(C) Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 29, 2021. REUTERS/Staff

By Sruthi Shankar

(Reuters) -European stocks recouped early losses on Wednesday as upbeat earnings forecast from German software group SAP and robust quarterly sales for French luxury goods maker LVMH helped soothe worries about inflation.

By 0824 GMT, the pan-European STOXX 600 index was up 0.2% after falling as much as 0.4% in opening trade. The German DAX gained 0.6% and France’s CAC 40 was flat, while UK’s FTSE 100 fell 0.4%.

SAP rose 4.5% after it raised its full-year outlook for a third time following a strong quarterly showing as more customers shift their IT operations to the cloud.

French luxury goods maker LVMH added 1.5% as sales at its fashion and leather goods division rose strongly in the third quarter but overall revenue growth in Asia and the United States eased after a stellar first-half performance.

“Lot of growth stocks, luxury, IT, all these have been the most affected by the recent rotation in favour of value,” said Roland Kaloyan, head of European equity strategy at Societe Generale (OTC:SCGLY). “My view is that fundamentals for growth stocks remain strong, and the recent rotation is an opportunity to build position.”

Kaloyan, however, added that third-quarter earnings season “will be the moment of truth for margin and pricing power stories.”

Helping sentiment on Wednesday was data that showed China’s export growth unexpectedly accelerated in September.

Worries about central banks exiting their pandemic-era stimulus, a global energy crunch and signs of elevated prices have all dampened the outlook for economic recovery, keeping the STOXX 600 nearly flat on the month after stumbling 3.4% in September.

The International Monetary Fund on Tuesday trimmed its 2021 global growth forecast to 5.9% from 6.0%, but left a 2022 forecast unchanged at 4.9%.

Third-quarter profit for STOXX 600 companies is seen rising 46.7%, as per Refinitiv IBES data, after a 152.6% in the previous quarter, with energy and industrial companies driving the biggest gains.

Meanwhile, investors will be tracking U.S. inflation data due later in the day for cues on the Federal Reserve’s monetary policy outlook.

Online food ordering and delivery service Just Eat Takeaway.com was the biggest decliner on STOXX 600, down 4.2%, after its third-quarter orders fell short of analysts’ estimates.

Apple Inc (NASDAQ:AAPL) suppliers including STMicroelectronics and AMS slipped after Bloomberg reported that iPhone 13 production is likely to be slashed.

Britain’s biggest housebuilder Barratt Developments (LON:BDEV) added 4.3% after it said that forward sales for the past three months had risen above pre-pandemic levels.

Shares in other homebuilders Persimmon (LON:PSN), Taylor Wimpey (LON:TW) and Berkeley Group (OTC:BKGFY) rose between 2% and 4%.

European stocks reverse losses on strong SAP, LVMH results

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Armorer, assistant director in focus of Baldwin movie set shooting probe

World18 minutes ago (Oct 24, 2021 02:05PM ET) (C) Reuters. FILE PHOTO: An aerial view of the film set on Bonanza Creek Ranch where Hollywood...

Tug fights container fire on cargo ship off British Columbia

World18 minutes ago (Oct 24, 2021 01:05PM ET) 2/2 (C) Reuters. Fire cascades down from the deck of the container ship ZIM Kingston into the waters...

Israel stocks lower at close of trade; TA 35 down 0.04%

Stock Markets53 minutes ago (Oct 24, 2021 12:30PM ET) (C) Reuters. Israel stocks lower at close of trade; TA 35 down 0.04% Investing.com - Israel stocks...

Latest Posts

Stay in touch

Join the exclusive subscription today and get premium articles for free

Categories