European Stocks Climb as Results, M&A Outweigh Virus Worries
(Bloomberg) -- European equities advanced on Tuesday as share buybacks, earnings and deal-making activity overshadowed concerns over the spread of the coronavirus and Italian politics.
The Stoxx Europe 600 Index rose 0.6% at the close, with cyclicals such as carmakers and chemical shares leading gains. Italy’s FTSE MIB Index was up 1.2%, shrugging off the resignation of Prime Minister Giuseppe Conte.
Positive corporate updates mitigated worries over the spread of the virus on Tuesday, even as the World Health Organization warned that vaccine coverage won’t reach a point that would stop transmission in the foreseeable future.
Still, since rallying at the start of the year, European stocks have been fairly rangebound as investors weigh the vaccine rollout with the emergence of new virus variants and further lockdowns. Marija Veitmane, senior multi-asset strategist at State Street Global Markets, said she is constructive on global equities, but is more optimistic on the U.S. and emerging markets than Europe and the U.K.
“For Europe, quite an important point is that it’s very cyclical, it’s very export-oriented, so currency strikes as a real sticking point,” Veitmane said by phone. “And all the problems with the vaccine rollout and lockdowns - they’re definitely weighing on the European outlook.”
UBS, Nokia Gain; Rolls-Royce, Novartis Fall: EMEA Equity Movers
Naturgy Energy Group SA was also a big mover, up 15% after IFM Global Infrastructure offered to buy a stake in the Spanish firm for $6.1 billion.
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