European shares rise on SAP’s upbeat outlook, China rally
Thu Jul 09 2020
Mark Cooper (2132 articles)

European shares rise on SAP’s upbeat outlook, China rally

European stocks rose on Thursday as software giant SAP signalled a rebound in its business from a coronavirus hit and China’s stock markets extended a rally, supporting risk sentiment in the continent.

The broader European equities index rose 0.3%, with technology stocks .SX8P surging 2.2% on the back of a fresh record high for SAP.

The German firm (SAPG.DE) jumped 7.8% after it confirmed its full-year outlook and said business activity gradually improved in the second quarter from the effects of a global lockdown.

Danish jewellery maker Pandora (PNDORA.CO) gained 4.9%, while Finnish drugmaker Orion (ORNBV.HE) jumped 6% after the companies lifted their profit forecasts.

The latest updates set a positive tone ahead of the second-quarter earnings season, which kicks off in earnest next week. Analysts are predicting companies listed on the STOXX 600 to record a near 54% drop in profits, according to Refinitiv data.

“We are in a position where companies can surprise positively versus expectations because the bar has come down quite sizeably for this year and activity has picked up substantially in the last two months,” said Guy Miller, chief market strategist at Zurich Insurance Co.

“The question is what happens from here. The more challenging period will be when we get into the autumn months – if can we keep the pace of recovery up or have we just had a knee-jerk rebound.”

Meanwhile, China-exposed miners .SXPP and luxury stocks rose, drawing comfort as a rally in Shanghai shares extended to the eighth day on hopes of a faster recovery for the world’s second largest economy. [.SS]

Frankfurt-listed shares .GDAXI outperformed its European peers with a 1.1% jump, even as data showed German exports rebounded less than expected in May.

Merck KGaA (MRCG.DE) and Roche (ROG.S) rose 1.1% and 0.7%, respectively, after Reuters reported the European Commission has struck deals with the drugmakers to secure supplies of experimental treatments for COVID-19.

However, losses in big UK tobacco companies and utilities weighed on the markets.

National Grid (NG.L) slid 3.8% after British energy regulator Ofgem said energy network operators should invest 25 billion pounds ($32 billion) from 2021 to 2026 to deliver emissions-free energy and proposed cutting returns these companies can make.

Airbus (AIR.PA) slipped 1.2% as first-half deliveries fell to a 16-year low despite a bounce in June numbers

Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.


Rules of Discussion on Live Index

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.