European Stocks Notch Highs, Daimler Earnings Lift Carmakers

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European stocks hit a record high on Friday after strong U.S. and China data spurred optimism about a speedy global recovery, while strong results from Germany’s Daimler boosted carmakers.

The pan-European STOXX 600 index rose 0.3%. The German DAX gained 0.6% to hit an all-time high, while UK’s FTSE 100 was up 0.4%.


Global stocks stood near record highs after data showed China’s economic recovery quickened sharply in the first quarter and U.S. retail sales rose by the most in 10 months in March.


German car and truck maker Daimler rose 2.5% as higher vehicle prices and strong demand in China helped it post a better-than-expected surge in quarterly operating profit.


The wider automobiles & parts index gained 1.6% to lead gains among European sectors. Data showed new car registrations jumped 87.3% in March in the European Union.


While the STOXX 600 is set for its seventh straight week of gains, the moves have been tight-ranged this week, with most European bourses holding near pre-pandemic levels.


“A lot of the good news has been priced in,” said Rupert Thompson, chief investment officer at Kingswood. “Equity markets are probably going to continue to trend higher but they definitely need to consolidate.”


Analysts expect profit for STOXX 600 companies to jump more than 55% in the first quarter after a slide of nearly 40% in the same quarter last year, according to Refinitiv IBES data.


Meanwhile, a Reuters poll of economists showed the euro zone economy will recover at a much weaker rate this quarter than expected only a month earlier, with a slower vaccine roll-out among the biggest risks.


The survey showed the bloc was set to emerge from a double-dip recession and grow 1.5% this quarter, but a sharp downgrade from the 2.1% predicted in March.


Bank of Ireland jumped 6.5% to the top of STOXX 600 after it reached a deal with Belgian financial group KBC to explore the sale of most of KBC’s Irish unit.


German meal kit delivery firm HelloFresh rose 4% after its first-quarter preliminary results beat expectations, leading to a 2021 outlook hike.


Lancome maker L’Oreal slipped 2% on disappointment at figures from the company’s consumer products division despite overall strong group results.


Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta


Source: Reuters

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