European shares rise on gains in utilities, tech

Investors buy into defensive sectors amid worries about soaring coronavirus cases

Photograph: iStock

Photograph: iStock

 

European shares rose on Thursday as French spirits maker Remy Cointreau surged after strong earnings outlook, while investors bought into defensive sectors amid worries about soaring coronavirus cases across the continent.

The Europe-wide Stoxx 600 index rose 0.4 per cent, bouncing off three-week lows hit on Wednesday. Utilities and healthcare stocks, sectors considered as safer bets during times of economic uncertainty, were among top gainers.

Technology stocks rose 0.8 per cent, their first session of gains in six days, after rising bond yields hit the high-growth sector earlier this week.

After concerns about faster US rate hikes dented global sentiment for most part of the week, strong US economic data helped Wall Street close higher on Wednesday and supported markets across the globe.

US market holiday for Thanksgiving Day is expected to keep trading activity subdued on Thursday.

“It is striking to see the resilience of stocks in the face of rising yields and a Fed intent on sending the message of a faster taper,” analysts at RBC said in a note.

However, they noted the uptick in the volatility index shows “investors are nervously buying protection against market turbulence.”

Coronavirus infections broke records in parts of Europe on Wednesday, with the continent once again at the epicentre of a pandemic that has prompted new curbs on movement.

Italy tightened the screws on people unwilling to take an anti-Covid vaccine, while France is set to announce new Covid-19 containment measures.

Data earlier showed a weaker-than-expected German economic expansion in the third quarter and tepid consumer sentiment ahead of Christmas shopping season.

Although regional indexes including Germany’s Dax, Italy’s Ftse MIB and France’s Cac 40 rose about 0.3 per cent each, joining broad market gains.

Remy Cointreau jumped 10.2 per cent to a record high after it raised full-year profit outlook as strong demand for its premium cognac drove a stronger-than-expected operating profit in the first half.

Rival Pernod Ricard gained 1.9 per cent, while London-listed Diageo climbed 0.9 per cent.

Radiation therapy equipment maker Elekta gained 6.4 per cent after it reported a smaller-than-expected fall in August-October earnings amid a growing need for cancer care and radiotherapy.

Swiss Life gained 3.6 per cent after it said it would launch a new 1 billion Swiss francs (€954 million) buyback and raise its dividend payout ratio.

Norway’s Adevinta, the world’s largest classified ads company, fell 2.2 per cent after it posted a smaller-than-expected rise in its third-quarter revenue. – Reuters