TECHNOLOGY and bank shares led Europe’s benchmark stock index more than 1 per cent higher on Thursday (Aug 15), with risk appetite boosted by strong US retail sales data that eased fears of a slowdown in the world’s largest economy.
The pan-European Stoxx 600 closed at a two-week high, up 1.2 per cent on the day to complete a reversal of the losses posted during the global market turmoil in the first half of August.
All the major regional bourses, including those of Germany, France, Italy and Spain were also more than 1 per cent higher.
US retail sales rose more than expected in July, keeping investor bets on a smaller than 50-basis-point Federal Reserve interest rate cut intact.
“The numbers should lay to rest – at least for the moment – all of the doom and gloom that was expressed at the beginning of this month,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
“The Fed can begin a rate-cutting cycle without the economy entering recession, and history shows this is an extremely positive environment for the stock market.”
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Rate-sensitive technology shares, among the hardest hit during the rout, were on Thursday’s biggest gainers, up 2.6 per cent with semiconductor players such as ASML Holding and ASM International leading the way.
The volatility “fear gauge” retreated to its lowest level since late July.
Banks, retail and automobiles were also among the top performers, although most sectors gained on the day.
Dutch payments company Adyen was the strongest individual performer, jumping 12 per cent to top the Stoxx 600 after market share gains helped it beat half-year core profit expectations.
British motor and home insurer Admiral climbed 6.5 per cent after posting a forecast-beating first-half profit.
AstraZeneca rose nearly 2 per cent, marking a record high for a fourth-straight session, after the US Food and Drug Administration granted its blockbuster cancer drug Imfinzi a priority review for patients with limited-stage small cell lung cancer in the United States.
Renewable energy group Orsted was the day’s worst Stoxx 600 performer, slumping 7.2 per cent after booking 3.9 billion Danish crowns (S$758.4 million) in impairment losses in the second quarter.
Swedish games developer Embracer fell more than 7 per cent after a reporting a 50 per cent drop in first-quarter operating profit, and Swiss plumbing materials supplier Geberit lost nearly 2 per cent after disappointing with a forecast for 2024 organic sales similar to those of last year. REUTERS
