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Europe close: Stocks advance, remain near record territory

By Alexander Bueso

Date: Monday 02 Aug 2021

Europe close: Stocks advance, remain near record territory

(Sharecast News) - European stocks continued advancing and were near record highs on Monday following a rebound in Asian shares overnight and after UK engineer Meggitt shares soared on a £6.3bn US buyout.
The pan-European Stoxx 600 index was up 0.59% to 464.45, alongside a 0.16% gain to 15,568.73 for the German Dax while the Cac-40 jumped 0.95% to 6,675.90.

London's FTSE 100 meanwhile traded up by 0.70% to 7,081.72.

"The FTSE 100 has enjoyed a strong start to the week, with the index outperforming its US and German counterparts as traders head for value names once again," said IG senior market analyst Josh Mahony.

"Recent fears around how Covid deaths could continue to rise in the wake of the July reopening have been allayed after the Sunday death count fell to 65 (from 71). With the UK experiences key in determining whether this vaccine provides enough protection to avoid another lockdown, yesterday's decline in cases and deaths does raise hope that we will soon see the world return to some sort of normality.

Investors were also digesting final Markit manufacturing purchasing managers' index readings for July which showed euro zone factory activity continuing to accelerate despite shortages of raw materials and rising costs. The final reading came in at 62.8, down from June's all-time high of 63.4 but ahead of a preliminary estimate of 62.6.

The sector has now recorded successive months of expansion since July 2020. In Germany, the rate of growth hit a three-month high that was the third-highest on record, behind March and April. The PMI rose to 65.9 in July from 65.1 in June, coming in above the flash estimate of 65.6.

UK manufacturing activity slowed to 60.4 from June's 63.9, having peaked at a record 65.6 in May.

In equity news British aero-engineer Meggitt was the standout gainer, soaring 57% after the board recommended the buyout offer tabled by US industrial firm Parker-Hannifin which values it at £6.3bn.

HSBC dipped even after Europe's biggest bank beat forecasts for first-half pretax profit and reinstated dividend payments.

French insurer Axa rose after it posted a 180% surge in first-half net income, while bigger rival Allianz fell after US regulators started a probe relating to Allianz Global Investors' Structured Alpha Funds.

Heineken shares edged up as the brewing giant doubled its first-half operating profit to €1.63bn but warned of rising costs.

British jet and auto parts supplier Senior jumped after it reported a first-half profit compared with a loss a year earlier. Peer Melrose gained 5.18%, while Rolls-Royce was up 4%.

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