European Stocks Pare Worst Month Since 2016 as Earnings Reassure
(Bloomberg) -- European equities rallied, trimming their monthly drop as corporate profit-beats spurred optimism.
The Stoxx Europe 600 Index jumped 1.1 percent, trimming a 6.1 percent monthly drop, the worst since January 2016. Airbus SE added 2.5 percent after more than doubling third-quarter profits. L’Oreal SA increased 6.2 percent after sales beat estimates yesterday, leading to several analyst rating upgrades. Pharmaceutical company Sanofi also rallied after boosting its outlook.
European equities joined global peers in a plunge this month as investors reconsider their stock investments in an environment of tighter monetary policy and as Italian budget talks spooked traders. Money managers are also carefully analyzing results, with about half of the European companies having reported so far, resulting in a 52 percent positive earnings surprise.
“October was a month to forget -- the size of the sell-off was somewhat surprising,” said Ulrich Urbahn, head of multi-asset strategy and research at Joh Berenberg Gossler & Co. KG in Frankfurt. “Although we also expect a moderate slowdown in the global economy in 2019, we believe that fears of a recession and thus the current sell-off are exaggerated.”
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