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European Stocks Higher; Evergrande News, L'Oreal Results Help

Stock MarketsOct 22, 2021 09:34
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© Reuters.

By Peter Nurse 

Investing.com - European stock markets traded higher Friday, helped by an easing of worries surrounding embattled property group China Evergrande as well as positive corporate earnings, notably French cosmetics giant L'Oreal.

At 3:50 AM ET (0750 GMT), the DAX in Germany traded 0.4% higher, the CAC 40 in France rose 0.8% and the U.K.’s FTSE 100 climbed 0.3%.

China Evergrande remitted $83.5 million in coupon payments to a trustee account at Citibank on Thursday, according to a report from Reuters, meaning the deeply indebted company will be able to pay interest to all bondholders before the expiry of a 30-day grace period on Oct. 23.

Although it wasn’t clear how the money was raised and there is still no sign of a comprehensive restructuring of its $300 billion in liabilities, this news has reduced the immediate chance of contagion, raising the global risk appetite.

Back in Europe, Remy Cointreau (PA:RCOP) stock rose 1.3% and L’Oreal (PA:OREP) stock soared 6% after the two French luxury goods retailers posted strong quarterly revenue growth, benefiting from continued strong demand from primarily Chinese consumers.

Essity AB B (ST:ESSITYb) stock climbed over 5% after the Swedish tissue maker reported a higher-than-expected rise in quarterly profit, thanks to the growing awareness of the importance of hygiene.

On the flip side, Renault (PA:RENA) stock fell 0.7% after the French auto giant warned that its production losses in 2021 would be far larger than previously forecast because of a global semiconductor chip shortage.

Evidence of the difficulties facing the semiconductor sector came from U.S. company Intel (NASDAQ:INTC) late Thursday, when it issued a weaker than expected sales report late Thursday citing an industry-wide chip shortage for its revenue miss.

London Stock Exchange (LON:LSEG) stock fell 3.7% after the exchange posted a small rise in revenue in the third quarter as it continues to try and integrate data platform Refinitiv.

The economic data slate offered up less impressive news, with U.K. retail sales falling unexpectedly for a fifth month in a row in September, dropping 0.2% on the month, adding to signs Britain's economic recovery is losing momentum.

Still to come are the purchasing managers indices from consultancy IHS Markit for the majority of Europe, while EU leaders continue their summit meeting in Brussels.

Crude prices edged lower Friday, continuing the previous session’s selling after Russian President Vladimir Putin indicated that a group of top producers, known as OPEC+, could increase supply by more than had previously been announced.

Still, these comments came after oil rallied to the highest level since 2014 earlier this week as a global energy crunch, prompted by coal and gas shortages in China, India and Europe, led to power providers switching to diesel and fuel oil. This has coincided with a broader economic recovery from the pandemic. 

By 3:50 AM ET, U.S. crude futures traded 0.1% lower at $82.42 a barrel, while the Brent contract fell 0.1% to $84.53.

Additionally, gold futures rose 0.7% to $1,793.75/oz, while EUR/USD traded 0.2% higher at 1.1645.

 

European Stocks Higher; Evergrande News, L'Oreal Results Help
 

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