European shares bounce after worst session in two months; UMG soars in debut

European shares rose on Tuesday after their biggest fall in two months on easing worries about the spillover from the crisis at China's Evergrande, while music label Universal Music Group soared 38% in its stock market debut.


Reuters | Updated: 21-09-2021 13:49 IST | Created: 21-09-2021 13:23 IST
European shares bounce after worst session in two months; UMG soars in debut
Representative Image Image Credit: Pixabay

European shares rose on Tuesday after their biggest fall in two months on easing worries about the spillover from the crisis at China's Evergrande, while music label Universal Music Group soared 38% in its stock market debut. The pan-European STOXX 600 was up 0.9% by 0743 GMT after sinking to a two-month low in the previous session.

Media, mining, and energy stocks led early gains, while Germany's DAX rebounded from its lowest level since late July. U.S. stock futures also bounced a day after global markets were roiled by concerns the potential default by Evergrande, the world's biggest property developer, could hurt China's real estate sector, banks, and the global economy.

Evergrande, struggling for cash, owes $305 billion. Focus this week is also on policy meetings at a slate of central banks, including the U.S. Federal Reserve, with investors expecting some of them to indicate they were ready to ease their pandemic-era stimulus to combat high inflation.

"Concerns about Evergrande remain but for now there appears to be a wait-and-see approach being adopted," said Michael Hewson, chief market analyst at CMC Markets UK. "The bigger question given the risks from events in China is whether the Fed adopts a less hawkish stance tomorrow to buy itself some time until the situation becomes clearer."

Europe's benchmark STOXX 600 has fallen from record highs in September after seven straight months of gains on fears of persistently high COVID-19 cases and signs of a slowdown in the global economic recovery. However, helping sentiment on Tuesday, travel-related stocks including British Airways-owner IAG, cruiseliner Carnival Corp and InterContinental Hotels Group jumped between 2% and 5% following the relaxation of U.S. travel curbs.

Britain's National Express rose 4% after rival Stagecoach Group said it was in talks with National Express about a possible all-share merger. Stagecoach's shares jumped 17.3%.

Universal Music Group, the business behind singers such as Lady Gaga, Taylor Swift, and The Weeknd, surged 38% in its first day of trading, giving it a market capitalization of more than 46 billion euros ($54 billion). Shares of owner Vivendi sank 16.7%.

Sweden's gardening power tools group Husqvarna tumbled 5.4% after warning it could potentially lose top-line sales of up to around 2 billion crowns ($230.7 million) due to a supplier dispute. All major European bourses were up in morning trading, with the UK's FTSE 100, Spain's IBEX, and Italy's FTSE MIB gaining between 0.7% and 0.9%.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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