Sunday, October 17, 2021

UPDATE 1-European stocks advance as tech gains counter virus issues

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(For a live Reuters blog on the US, UK and EU stock markets, click LIVE / or type LIVE / in a news the window)

* Tech equities drive markets globally

* Travel and leisure industry hit by foreclosure fears

* Prosus hit record high (add comment, update prices)

Jan. 25 (Reuters) – European stocks edged higher on Monday, as gains in tech stocks and bullish earnings reports helped investors overcome the possibility of extended lockdowns in many countries struggling with new variants of the new coronavirus.

The pan-European STOXX 600 index rose 0.2%. Tech stocks rose 1.2% and gained the most among sectors, with their US counterparts trading near all-time highs.

European tech investor Prosus jumped 6% to an all-time high, as chipmakers climbed amid signs of a global chip shortage.

Dutch health-tech company Philips rose 2.5% after reporting a 7% increase in its fourth quarter core profit as the pandemic continued to drive demand for hospital equipment to treat patients with COVID-19.

Wind turbine maker Siemens Gamesa gained 2.6% after reiterating its sales and profit margin targets, while its counterpart Siemens Energy rose 1.6% after reaching basic profit in its first fiscal quarter.

“Profits will be a very important driver: failure to meet expectations will likely weigh negatively on stocks,” Unicredit analysts wrote in a note.

“Indications that the UK variant of the virus is not only more contagious but also more dangerous are likely to be sentiment negative.”

British stocks came under pressure after the Health Minister said on Sunday that 77 cases of the South African variant of COVID-19 had been detected in Britain, while French stocks were down amid the discussions about a third lockdown.

IAG, Ryanair, Lufthansa and Air France KLM, owner of British Airways, fell between 3.9% and 6.9%, while retailers fell 0.4%.

US President Joe Biden is set to reimpose an entry ban on nearly all non-US travelers who have been to Brazil, the UK, Ireland and 26 countries in Europe that allow crossing open borders .

Meanwhile, a survey showed German business morale fell more than expected in January as a second wave of COVID-19 halted the recovery of Europe’s largest economy.

The STOXX 600 ended almost flat last week after data showed the dominant service sectors in Europe were hit hard by the resumption of lockdowns in January.

Among other shares, Siltronic slipped 2.6% even as Taiwan’s GlobalWafers again increased its bid for the German silicon wafer maker by 150 million euros ($ 183 million) as it tried to convince the shareholders of the target company.

French electricity group EDF fell 11.9% to the bottom of STOXX 600. (Report by Sruthi Shankar in Bengaluru; edited by Arun Koyyur and Subhranshu Sahu)


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