European stocks rise to 6-week highs on positive corporate earnings, sectoral strength
Date
4/24/2024 4:30:52 AM
(MENAFN) European Stocks surged on Tuesday, marking their most significant daily gain in six weeks, as investor sentiment was buoyed by robust performance across retail and technology sectors. The European STOXX 600 index rallied by 1.1 percent, with technology stocks leading the charge, boasting a 2.6 percent increase. Notably, SAP, a German tech giant, reported a remarkable 24 percent surge in revenues from cloud services in the first quarter, totaling 3.93 billion euros (USD4.19 billion), attributed to robust demand for ERP software. This stellar performance propelled SAP's shares up by 5.3 percent, contributing to the overall bullish sentiment in the market.
Italian stocks outperformed their European counterparts, while the British FTSE 100 index reached unprecedented highs for the second consecutive day, benefiting from the weakness of the pound sterling and positive corporate earnings reports. The retail sector index surged by 2.2 percent, with H&M shares climbing by 4.2 percent following an upward revision in the target price by Morgan Stanley. Additionally, Swedish banking services platform NordNet emerged as the top performer in the STOXX 600 index, posting gains of nine percent after surpassing expectations with its first-quarter operating profits.
Associated British Foods witnessed a notable uptick of nine percent in its shares after the company, owner of Primark, anticipated "significant growth" in profits for the full year, bolstering investor confidence in the retail sector. The rally in European stocks signaled a rebound from recent lows, with concerns over escalating conflict in the Middle East subsiding, coupled with positive corporate earnings announcements and growing expectations of interest rate cuts.
Data from London Stock Exchange groups revealed a forecasted decline of 12.1 percent in first-quarter profits compared to the previous year. Despite this, market sentiment remained largely positive, driven by the optimism surrounding strong corporate performances and the prospect of monetary policy support. The robust showing of European stocks underscored resilience in the face of geopolitical uncertainties, with investors increasingly focusing on fundamentals and earnings outlooks to guide their investment decisions in the current market environment.
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