SPY443.91+0.73 0.16%
DIA347.87+0.31 0.09%
IXIC15,047.70-4.55 -0.03%

UPDATE 1-European stocks edge towards record highs shaking off growth worries

UPDATE 1-European stocks edge towards record highs shaking off growth worries

reuters.com · 09/01/2021 04:39
UPDATE 1-European stocks edge towards record highs shaking off growth worries

For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window

China data spurs policy easing hopes

Yields extends gains, lift banks

Euro zone August factory growth strong - PMI

Adds comment, updates prices

By Sruthi Shankar

- European stocks edged closer to record highs on Wednesday as fresh signs of weakness in Asian economies were offset by hopes for more stimulus, while investors shook off concerns about rising inflation.

After seven straight months of gains, the pan-European STOXX 600 .STOXX started September with a 0.9% rise, holding just a point below its life high.

Asian shares recovered from earlier losses after data showed factory activity across the region lost momentum in August, spurring hopes of more stimulus from central banks. nL1N2Q3065

Meanwhile, a survey showed euro zone manufacturing growth remained strong in August, but supply chain issues due to the pandemic continued to constrain supplies of raw materials, driving up prices. nZRN002PAI

Investors were unsettled after data on Tuesday showed euro zone inflation surged to a 10-year-high in August, while an European Central Bank policymaker called on the bank to reduce its emergency bond purchases as soon as the next quarter. nL1N2Q20QH nS8N2MM039

The bloc's banks .SX7E continued to benefit from rising government bond yields. GVD/EUR

"Elevated inflation in the U.S. and Europe, weak retail sales in Germany and a slowdown in China all suggest that the market should be factoring in a temporary slowdown in economic activity," Sebastien Galy, senior macro strategist at Nordea Asset Management said.

"What the market is focused on instead is that liquidity should remain very ample from the People's Bank of China to a slow pace of tapering from the Fed and eventually one from the ECB."

Data due later in the day is likely to show euro zone unemployment rate dipped to 7.6% in July from 7.7% in the previous month.

Retail .SXRP and travel & leisure .SXTP stocks were the top sectoral gainers, all rising more than 1.5%.

French spirits maker Pernod Ricard PERP.PA rose 3.3% after it posted a stronger-than-expected rise in full-year operating profit, driven by a strong rebound in demand in China and the United States. nL8N2PX2BK

Airline SAS SAS.ST gained 1.4% after reporting a smaller quarterly loss as air travel gradually picked up. nL8N2Q312S

French diagnostics specialist BioMerieux BIOX.PA climbed 4.7% to the top of STOXX 600 after it confirmed its full-year earnings target. nFWN2Q20XZ

Supermarket group Carrefour CARR.PA slid 4.2% as luxury goods billionaire Bernard Arnault sold the 5.7% stake he owned in the company. nL1N2Q30CM

European stocks benchmark hovers below record highshttps://tmsnrt.rs/3jA78mA

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787))