European shares rise on Evergrande relief, gains in travel and leisure

Markets recover early-week losses

Photograph: iStock

Photograph: iStock

 

European stocks rose on Wednesday, recovering from its early-week losses after debt-laden China Evergrande said it would make some interest payments, while travel and leisure stocks jumped to a 14-week high.

Evergrande’s Frankfurt-listed shares jumped 24 per cent after hitting multi-year lows in the previous session.

The property developer said it would make a coupon payment on its domestic bonds, offering relief to investors worried about the fallout of its financial troubles.

Boosting the travel & leisure index, Entain jumped 6.2 per cent to a life high after the UK gambling firm revealed a $22.4 billion takeover proposal from Boston-based DraftKings, which was nearly double the bid it rejected from MGM this year.

The pan-European Stoxx 600 rose 0.5 per cent, extending Tuesday’s bounce after its worst session in two months, with commodity-linked stocks also in the lead.

Meanwhile, in the United States, the Federal Reserve is set to conclude its two-day policy meeting later in the day, with investors expecting it to clear the way for cuts to its monthly asset purchases later this year and update its inflation and growth projections.

“Fed Chair Jerome Powell will most probably be clear on the central bank’s commitment to start lowering bond purchases before year-end but short on details about the pace and the composition of tapering,” Unicredit analysts said in a note. “An announcement like this would be in line with Powell’s presentation at the central bank symposium in Jackson Hole in late August and is unlikely to surprise investors.”

After seven straight months of gains, sentiment has soured across global equities in September on worries about China’s slowing growth, the fast-spreading Delta variant of Covid-19 and tighter monetary policies.

The Stoxx 600 is down more than 2 per cent so far this month and is set for its worst monthly performance in about a year. Deutsche Post fell 1.3 per cent after US delivery firm FedEx Corp cut its full-year forecast after labour shortages crimped earnings and slowed packages.

German truck maker Traton slid 0.6 per cent after it said that sales in September were particularly hit by a global shortage of chips and other car parts. – Reuters