Europe Stocks Post Longest Winning Streak Since 2018 on Earnings
(Bloomberg) -- European shares hit a fresh record, extending the longest streak of weekly gains since 2018, as investors embraced the solid start to the earnings season amid optimism for an economic recovery.
The Stoxx Europe 600 Index rose 0.9% by the close in London, led by the automotive sector amid booming car sales and as Daimler AG climbed after its earnings “significantly” topped estimates. Basic resources stocks advanced after U.S. bellwether Alcoa Corp.’s results beat expectations, owing to a surge in aluminum.
A positive start to the earnings season and robust economic data from the U.S. and China are providing investors with confidence that the global recovery is under way. The Stoxx 600 has risen for seven straight weeks on the back of generous monetary stimulus and a spending spree from governments across Europe, with investors betting that a gradual reopening of economies will lead to increased consumption.
“The market is in risk-on mood and will continue like that for a few weeks as earnings have had a very strong start and the pandemic is set to be under control,” said Alfonso Benito, chief investment officer at Spanish asset manager Dunas Capital.
Goldman Sachs Group Inc. strategists said in a note that they expect earnings-per-share for the Stoxx 600 to grow 40% this year, compared with 35% for the consensus view. Despite continued lockdowns across Europe, the strategists expect the economic reopening to start in May, paving the way for a “strong” recovery in the summer.
Among individual moves, HelloFresh SE jumped 3.3% after boosting its sales forecast, while L’Oreal SA declined 1.8% from near record levels even after the beauty giant said sales rose in the first quarter. LVMH climbed 2.2% after its chief executive officer on Thursday said the luxury giant gained market share during the pandemic.
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