Oct 31, 2023: European shares climbed on Tuesday, led by real estate and chemical stocks, with investors drawing comfort from a slew of corporate earnings beat, while focusing on major economic data releases throughout the day.
The pan-European STOXX 600 was up 0.6% by 0930 GMT.
However, the index was poised for its worst monthly performance since September 2022 on recession fears amid weak economic data and downbeat earnings updates.
The benchmark index was also set to log its third straight monthly decline, down nearly 8% during the period.
“I’m not reading too much into today’s gains, as to some degree, it’s kind of making up for lost ground,” said Michael Field, European equity strategist at Morningstar.
“We’re back in that place where equities aren’t expensive, but they’re not cheap either. Unless the economic picture changes to the positive, there’s no reason why equity markets should rally strongly into the year-end.”
Automobiles were on track to be the worst hit in October, while media the top gainer.
On the data front, German retail sales fell in September due to persistently high inflation.
Preliminary data showed the French economy grew by 0.1% in the third quarter, with growth slowing from the previous quarter but staying just above zero thanks to household spending.
Euro zone inflation during the day and the U.S. Federal Reserve’s policy decision on Wednesday are at the top of investors’ watch list.
For the day, real estate was the top sector performer with a 1.9% advance, with Belgian healthcare real estate investment firm Aedifica jumping 5.5% after raising full-year earnings outlook.
The chemicals sector also gained 1.6% as Germany’s BASF rose 4.1% despite a drop in third-quarter core earnings and a downgrade in its full-year guidance as markets feared worse results.
The energy sector was the worst hit due to a 4.5% fall in BP (NYSE:BP) after third-quarter earnings missed analysts’ forecasts.
Engineering group Wartsila was the top gainer on the STOXX 600, up 14%, after beating third-quarter result estimates and a positive outlook surprise.
Germany’s Uniper , which was bailed out during Europe’s energy crisis, jumped 7.2% after swinging to a nine-month net profit.
Siemens Energy fell 2.3% after sources said the company is considering selling a part of its 24% stake in Indian-listed Siemens Ltd to former parent Siemens AG (OTC:SIEGY) to shore up its balance sheet. Siemens AG shares were up 0.7%.
Source Courtesy: Reuters