STOXX 600 rises 0.3% German economy shrinks 0.1% in second quarter Santander Bank surges on share buyback program Airlines rise on Ryanair outlook Bunzl rises full-year profit forecast and surges
Aug 27 (Reuters) – European stocks rose on Tuesday on gains in banking and airline stocks but trading remained cautious ahead of the release of key economic data later this week.
Travel & Leisure (.SXTP)(opens in new tab) and Banking (.SX7P)(opens in new tab) were the day's top gainers, rising 0.7% and 0.9%, respectively. The pan-European STOXX 600 index (.STOXX)(opens in new tab) rose 0.2% to 518.88 points. Spanish bank Santander (SAN.MC)(opens in new tab) rose 2.5% after it launched a 1.525 billion euro ($1.7 billion) share buyback program. Meanwhile, the travel sector was boosted by Ryanair (RYA.I)(opens in new tab) raising its outlook for summer airfares. Ryanair rose 4.6%, followed by EasyJet (EZJ.L), (opens in new tab) 6.9%, and Wizz Air (WIZZ.L), (opens in new tab) 5.2%. Germany's benchmark DAX (.GDAXI), opens in a new tab, rose 0.4%, while detailed GDP data released earlier in the day showed Europe's largest economy contracted 0.1% in the second quarter of 2024.
Further data from the region's major economies is awaited this week, as well as European Union inflation and US inflation data on Friday.
Investors are hoping for further signals on the state of the euro zone economy as well as the policy stance of the European Central Bank and the Federal Reserve ahead of their September interest rate decisions.
“The US could fall into recession, but Europe continues to narrowly avoid recession and is more vulnerable,” said Thierry Wisman, global currency and rates strategist at Macquarie.
“These ominous sentiments will likely keep stock markets sensitive to periodic negative growth surprises like those seen in late July.”
European Central Bank policymaker Klaas Nott said the euro zone central bank could gradually cut interest rates if inflation continues to fall, but more data is needed before confirming a September rate cut. AI sector darling Nvidia's second-quarter results, due to be released on Wednesday, are expected to be a key trigger for global stock markets, and even a slight miss could hit the company's shares. The European tech sector (.SX8P) reversed early losses to close 0.2 percent higher. On regional bourses, Spanish shares (.IBEX) rose 0.6 percent to their highest since early June, led by gains in Banco Santander. Among individual stocks, British business goods retailer Bundl (BNZL.L) surged 8 percent, the biggest gainer on the STOXX 600 index. The company raised its annual adjusted operating profit outlook. Spain's Talgo (TLGO.MC) slumped 10 percent on Tuesday after the government blocked a government investment plan. Hungarian consortium Gancz Mavag bought the train manufacturer for 619 million euros, citing national security concerns.
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Reporting by Pranav Kashyap and Lisa Matakkal in Bengaluru; Editing by Shelley Jacob Phillips, Rashmi Aich and Susan Fenton
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