FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 28, 2020. REUTERS/Staff
October 1, 2020
By Sruthi Shankar
(Reuters) – European stocks rose on Thursday as Swedish retailer H&M and French-Italian chipmaker STMicroelectronics jumped after reporting forecast-beating results, while hopes of more U.S. stimulus aided global sentiment.
H&M <HMb.ST> surged 6.2% as it reported a third-quarter profit above analysts’ expectations and said sales continued to recover in September. The retail index <.SXRP> rose 1.6% to lead sectoral gains.
Paris-listed shares of STMicroelectronics <STM.PA> jumped 6.1% after it forecast 2020 sales above previous estimates and said a sharp rise in automotive and microcontroller demand helped third-quarter preliminary results.
Shares of peers Infineon Technologies <IFXGn.DE>, Dialog Semiconductor <DLGS.DE>, ASMI <ASMI.AS> and ASML <ASML.AS> gained between 2.0% and 5.3%.
After European markets ended the third quarter subdued on worries about a resurgence in European COVID-19 cases, Brexit deal and the U.S. presidential election, the mood brightened on Thursday amid signs of progress of a stimulus bill in Washington.
“The renewed optimism regarding a deal led to a decent enough start in Europe,” Connor Campbell, financial analyst at SpreadEx wrote in a note. “If a deal doesn’t materialise tonight … the markets could wakeup with a nasty hangover.”
The pan-European STOXX 600 index <.STOXX> rose 0.5%, but came off session highs, with bourses in Paris <.FCHI> and London <.FTSE> up about 0.7%.
German stocks <.GDAXI> edged up 0.1%, weighed down by a 10.7% slump in drugs company Bayer <BAYGn.DE> after it flagged that adjusted profit may slip next year and it may have to write down the value of agriculture assets by close to 10 billion euros.
A final reading of German manufacturing activity in September showed recovery accelerated, with IHS Markit’s Purchasing Managers index (PMI) rising to 56.4, even though it was below a flash estimate of 56.6.
Spanish and French PMI readings were better than expected, while the broader euro zone recovery was in line with expectations.
British retailer Halfords <HFD.L> raced 20% higher after raising its first-half profit outlook as a coronavirus-driven cycling boom continues.
Italy’s Banco BPM <BAMI.MI> rose 1.6% after sources told Reuters that bad loan managers AMCO and Credito Fondiario are in a race to buy loans known as ‘unlikely to pay’ worth around 1 billion euros from the bank.
Deutsche Telekom <DTEGn.DE> rose 2.1% after Goldman Sachs added the company to its conviction list, while Denmark’s Orsted <ORSTED.CO> gained 3.3% after Berenberg started covering its stock with a “buy” rating.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)
