Europe Stocks Gain Most Since April as Traders Eye Earnings
(Bloomberg) -- European equities staged a sharp recovery from last week’s market carnage as most sectors rallied and investors turned their attention to the start of earnings reports.
The Stoxx Europe 600 Index added 1.6 percent, the biggest intraday advance since early April. Media shares, including Publicis Groupe SA and WPP Plc, climbed after Omnicom Group Inc. reported third-quarter profit that beat average analyst estimates. Real estate shares also rose, led by Inmobiliaria Colonial following the Spanish company’s 718 million-euro ($832 million) investment announced late Monday.
Industrials rallied as U.S. news media reported Saudi Arabia is considering a possible explanation for a journalist’s disappearance that might enable the U.S. and Turkey to avoid a confrontation with the oil-rich kingdom and reduce the risk of another potential trade conflict.
European equities are recovering from last week’s sell-off, which dragged the index to December 2016 lows, as surging bond yields pushed investors to rotate away from stocks. The region’s projected earnings growth for this year is equivalent to about a quarter of double-digit U.S. profit estimates -- a discrepancy that has weighed on European stocks.
“We think over the next six-month period equities can still go higher because we expect earnings growth to start to come through now and that’s what investors will focus on again,” Mark Haefele, global chief investment officer at UBS Wealth Management, said on Bloomberg TV Tuesday.
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