FRANKFURT, March 11 ― Europe's main index hovered near pre-pandemic highs yesterday, as a rise in shares of Adidas after an upbeat sales forecast and gains in telecoms and healthcare stocks outweighed losses in the mining and travel sectors.
The pan-European STOXX 600 index rose 0.4 per cent after a rally in technology stocks on Tuesday pushed the benchmark to its highest level since February 2020.
Miners, retailers, and travel and leisure companies led the declines in Europe, while telecoms jumped 2.3 per cent and healthcare rose 1.0 per cent.
Most European sectors have had some time in the spotlight this week, starting with gains in cyclicals, then a tech rally, and then a rise in defensives yesterday.
“People investing in European markets right now are from overseas like the United States, consequently they have a view that they'd like a little bit of everything from each sector. It is this general view of Europe vs. America and Europe is cheaper,” said Chris Bailey, European strategist at Raymond James.
German sportswear maker Adidas AG added 2.8 per cent as it aims to double its e-commerce sales by 2025 and make its products more sustainable as part of a five-year plan to lift profitability closer to that of rival Nike.
Germany's DAX index has had a strong start to March, hitting an all-time high again during the session, with analysts pointing to the economy's focus on international exports giving it an edge over other regions such as France or Spain, which have a more European focus.
“The most important thing about Germany apart from the companies it has on its index is its exports, so the great advantage of an economy like Germany is that it gives you an opportunity to access international options through a European channel,” Bailey said.
However, trading has been volatile in recent weeks as government bond yields rose on concerns that central banks could begin tightening monetary policy as global economy recovers, raising borrowing costs.
Calming some fears about inflation was a report on US consumer prices that showed the US consumer price index rose 0.4 per cent in February, in-line with expectations, after a 0.3 per cent increase in January.
Boosting telecom sector, Deutsche Telekom rose 4.9 per cent after Citigroup upgraded the stock to “buy” from “hold”, saying the company has a solid position across all its market segments.
Just Eat Takeaway.com gained 5.9 per cent after the food-ordering company said it expected further growth in 2021. ― Reuters
