European stocks rise on Wall Street support, travel shares jump 3%
European stocks rose on Thursday as a rebound in travel stocks and overnight strength in Wall Street helped offset concerns about China’s slowing economy that dragged down miners.
The pan-European STOXX 600 index (.STOXX) rose 0.7%, bouncing off a six-week closing low hit in the previous session.
Travel & leisure (.SXTP) jumped 3.1% to break a four-day losing run, while automakers (.SXAP) rose 0.6% to a one-month high.
Europe’s largest low cost carrier Ryanair (RYA.I) surged 5.6% after it raised its long-term traffic forecast. Rivals easyJet (EZJ.L), British Airways-owner IAG and Wizz Air (WIZZ.L) gained almost 4% each.
While Asian stocks came under pressure from concerns about China’s economy and the fallout from debt-ridden developer China Evergrande Group’s (3333.HK) financial troubles, European stocks were on a firm footing as strong U.S. data on Wednesday reinforced optimism about a recovery in the world’s largest economy.
“Some decent corporate news and an upbeat report from the U.S. manufacturing sector outweighs continuing worries about China which is dragging down mining stocks and other firms with links to the Chinese economy,” AJ Bell Investment Director Russ Mould said.
Miners including Rio Tinto (RIO.L), Anglo American (AAL.L) and BHP Group (BHPB.L) were among the top drags as metal prices fell after China reiterated plans to release more metals from its reserves.
German automotive supplier Continental AG (CONG.DE) fell 2.5% to the bottom of STOXX 600 after the spin-off of its unit Vitesco.
The utilities index (.SX6P) edged up 0.1% after a near 3% fall on Wednesday. Spain passed emergency measures earlier this week to reduce energy bills, raising concerns over the hit to utilities’ profits.
Spain’s Endesa (ELE.MC) and Iberdrola (IBE.MC) extended losses for a third day to fall to their lowest since 2020.
Italy is also looking to introduce short-term measures to offset the expected rise in retail power prices, a minister said in radio interview. read more
“Stocks in the sector are suffering from the risks of regulatory intervention, as in Spain, and it will be necessary to see how other governments in Europe will intervene,” Equita analysts said.
“Current prices do not reflect high energy and gas prices.”
Paris Match magazine owner Lagardere (LAGA.PA) surged 20.3% after media group Vivendi (VIV.PA) said it would buy another stake in the company, paving the way for a full takeover. read more
British fashion brand Superdry (SDRY.L) jumped 14% after it forecast a recovery in full-year 2022 revenue.