European Stocks Rise as Rate Cut Bets Grow, DAX Closes at Record
(Bloomberg) -- European stocks rallied close to a record high as companies reported strong earnings and data from Spain and Germany showed cooling inflation, reinforcing expectations for lower interest rates.
Most Read from Bloomberg
Dense Cities With Low Emissions Suffer Most From Air Pollution, Study Finds
Intergenerational Housing Could Help Older Adults Combat Loneliness
As Rural Hospitals Shutter Maternity Wards, Urban Ones Follow
The Stoxx 600 Index ended the session with a 0.8% rise, notching a third day of gains, while Germany’s DAX Index advanced 0.7% and closed at a record. Tech shares rallied, with investors brushing off disappointment after US technology bellwether Nvidia Corp. saw its outlook tested by lofty market expectations.
Economic data showed German inflation slowed to the European Central Bank’s target in August, while Spanish inflation eased to its lowest level in a year, supporting a case for the central bank to continue easing.
Earnings also bolstered the optimistic mood. Pernod Ricard SA rose after the premium spirits maker’s fourth-quarter earnings broadly met expectations. Delivery Hero SE gained after its results beat. Universal Music Group NV was another top gainer following an analyst upgrade.
“Investors are starting to believe once again that this direction of travel in the western world to lower rates is now set. Add to that we’ve come out of earnings season unscathed, and that is enough to renew investor optimism and drive markets to highs,” Michael Field, European market strategist at Morningstar, said.
Nokia Oyj was another sizable gainer, rising after Bloomberg News reported that the Finnish firm’s mobile networks assets are drawing preliminary interest from suitors including Samsung Electronics Co.
Guy Stear, head of developed markets strategy at Amundi Investment Institute, said that he prefers European equities to the US on valuations, and sees some tactical value in Japan as well.
“Equities in aggregate have gone from fair value to cheap, back to fair value in the past month,” said Stear. “We think markets will range trade now into the end of November.”
For more on equity markets:
There’s a Feeling of Complacency in This Market: Taking Stock
M&A Watch Europe: Concentric, Unieuro, Teleperformance, IG Group
Birkenstock Rally Leaves No Room for Earnings Error: ECM Watch
US Stock Futures Drop as Nvidia Forecast Clouds AI Rally Outlook
For Sale Signs Soar: The London Rush
You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.
--With assistance from Jan-Patrick Barnert and Michael Msika.
Most Read from Bloomberg Businessweek
Hong Kong’s Old Airport Becomes Symbol of City’s Property Pain
Far-Right ‘Terrorgram’ Chatrooms Are Fueling a Wave of Power Grid Attacks
©2024 Bloomberg L.P.