Upbeat earnings push European stocks to seven-week highs
European stocks hit seven-week highs on Tuesday, as strong results from UBS, Reckitt Benckiser, and others added to overall optimism about the third-quarter earnings season.
The pan-European STOXX 600 rose 0.7%, edging closer to its record high after the global mood was lifted by all-time highs for Wall Street indexes. Lysol cleaning products maker Reckitt Benckiser Group jumped 5.7% after it raised its full-year forecast and beat estimates for third-quarter sales.
Reckitt was the top gainer on UK's FTSE 100, which rose 0.7%, while Germany's DAX and France's CAC 40 gained 1.1% and 0.8%, respectively. "A lot of the companies have been benefiting from the high prices they've been charging," said Equity Capital macroeconomist Stuart Cole, who expects a positive earnings season for European companies.
"Equity markets are doing well despite soaring energy prices, the threat of higher interest rates and yields generally rising...all points to markets getting more comfortable with where things are." Despite concerns about soaring commodity prices and supply-chain bottlenecks driving higher inflation, a series of strong earnings reports put the STOXX 600 on course to end October with gains while erasing all of September's losses.
The focus will also be on the European Central Bank meeting on Thursday, where policymakers are set to meet amid soaring inflation expectations in the eurozone. The ECB has said the recent inflation surge will be transitory and has indicated no policy tightening until it averages around its 2% target. The financial services sector rose 0.8% as the world's largest wealth manager UBS posted its best quarterly profit since 2015, helped by robust trading activity.
Swiss drugmaker Novartis also inched up after reporting a rise in adjusted operating profit and forecasting higher peak sales for its two best-selling pharmaceuticals. Among decliners, computer peripherals maker Logitech International slumped 6.4% after it confirmed its full-year earnings outlook and warned of supply-chain disruptions.
French telecoms operator Orange fell 3.2% after saying its third-quarter profit was hit by a drop in co-financing returns.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)