European Equity Gain Loses Momentum After U.S. Jobless Claims
European Equity Gain Loses Momentum After U.S. Jobless Claims
(Bloomberg) -- European stocks closed slightly higher, giving up most of their gains in afternoon trading as an unexpected rise in U.S. jobless claims offset better-than-feared earnings..
The Stoxx 600 Index was up less than 0.1% at the close. Unilever jumped 7.8% in Amsterdam after the consumer goods giant’s second-quarter sales beat analyst estimates. Daimler AG rose 4.3% after the German carmaker posted what Goldman Sachs Group Inc. called strong cost savings and a reassuring outlook in its results.
Forecast-beating earnings and this week’s landmark agreement from European Union leaders on the recovery fund have helped offset headwinds including the Covid-19 pandemic and fresh tensions between the U.S. and China.
“The mix is very explosive at the moment and cheap stock markets are long gone,” said Comdirect Bank AG strategist Andreas Lipkow. “In this environment equity markets still hold up very well, which of course is also due to the afterglow of the EU summit agreement.”
The Stoxx 600 index is struggling to break above a key resistance level, represented by its 200-day moving average. A decisive break above that level would send a positive technical signal. Investors are still underpositioned in European stocks, Goldman Sachs strategists led by Sharon Bell wrote in a note, saying the region’s equities can outperform the U.S. in the near term.
Among sectors, gold miners rose after strong production updates from Polymetal International Plc and Petropavlovsk Plc, while bullion climbed to a nine-year high. Berenberg strategist Jonathan Stubbs said gold is entering a “golden age” with uncertainty, central bank liquidity and geopolitical risk continuing to provide a supportive backdrop. Gold miners are still well off their highs, Stubbs added in a note.
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