NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

European stocks end slightly higher as defence firms hit record high

Published 07/08/2023, 08:14
Updated 07/08/2023, 17:11
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the Frankfurt stock exchange in Frankfurt, Germany, March 17, 2023.    REUTERS/Staff/File Photo
DE40
-
DB1Gn
-
HG
-
STOXX
-

By Shashwat Chauhan, Amruta Khandekar and Shristi Achar A

(Reuters) - European stocks edged higher on Monday as investors awaited key inflation figures from across the globe this week to gauge the outlook for interest rates, while the defence sector rose to record highs amid rising geopolitical uncertainty.

The pan-European STOXX 600 closed up 0.1% ahead of inflation readings from Germany, China and the U.S. later this week, all likely to drive expectations on how long interest rates could remain high.

The basic resources index was down 1.0% as shares of Aurubis AG fell 9.5% despite Europe's largest copper producer reiterating its forecast for a strong core profit in its current financial year.

"We've seen a little bit of negative momentum from these earnings because investors are punishing the fact that these results are actually even more dire than expected, considering that expectations were already pretty low," said Daniela Hathorn, senior market analyst at Capital.com.

Stemming losses, the healthcare sector gained 0.6%, lifted by 3.1% gains in Bavarian Nordic after the Danish biotech company reported positive late stage topline results for its Chikungunya virus vaccine.

Europe's aerospace and defence index hit a record high, rising 1.0%, with Italy's Leonardo and London-listed Melrose up 3.1% and 2.6% respectively.

"We're still talking about the Chinese and Ukrainian conflict. So geopolitical risk is increasing and that's good for that part of the market," said Anthi Tsouvali, multi-asset strategist at State Street (NYSE:STT) Global Markets.

Major European bourses were mixed, with London's commodity-heavy FTSE 100 down 0.1%, while France's blue-chip CAC 40 index rose 0.1%.

Pressuring Germany's DAX, Siemens Energy dropped 6.1%, having shuttled between gains and losses throughout the day.

The German energy group said problems recently unveiled at its wind turbine unit would cost it 2.2 billion euros ($2.4 billion), well short of worst-case estimates but still casting doubt over the future of the business.

The benchmark STOXX 600 posted its first weekly decline in four on Friday as a mixed U.S. jobs data, slowing business activity across the euro zone and a surprise U.S. credit rating downgrade all dented the mood.

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the Frankfurt stock exchange in Frankfurt, Germany, March 17, 2023.    REUTERS/Staff/File Photo

Meanwhile, a Sentix survey showed investor morale in the euro zone unexpectedly rose in August, ending three consecutive months of decline as inflation lost some of its explosive power, but there were no signs of a lasting turnaround in sentiment.

Scout24 SE jumped 5.4% after the online property platform raised its full-year guidance, while PostNL climbed 9.5% after the Dutch postal firm lifted its 2023 operating profit guidance.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.