Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Tech, earnings lift European stocks as Biden inches closer to victory

Published 11/05/2020, 05:17 AM
Updated 11/05/2020, 05:20 AM
© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

By Sruthi Shankar

(Reuters) - European shares hit a two-week high on Thursday, supported by a handful of strong earnings reports, more stimulus for Britain's economy and a surge in Wall Street stock futures, as Democrat Joe Biden moved closer to victory in the U.S. presidential race.

In its fifth day of gains, the pan-European STOXX 600 index (STOXX) rose 0.6% to hit its highest level since Oct. 20, with technology stocks (SX8P) once again leading the way.

Dialog Semiconductor (DE:DLGS) jumped 7.2% after it reported third-quarter revenue at the higher end of its previously forecast range.

French lender Societe Generale (PA:SOGN) gained 2.8% after it swung back to a quarterly profit as its equity trading business continued to recover from a weak start to the year.

Meanwhile, U.S. futures jumped over 1%, as Biden held narrow leads in Nevada and Arizona, while Republican President Donald Trump was watching his slim advantage fade in must-win states Pennsylvania and Georgia as mail-in and absentee votes were being counted.

Tech stocks looked set to outperform, as the likelihood of a gridlock in U.S. Congress made investors optimistic that tighter regulation and higher corporate taxes on American firms might be hard to enact. [MKTS/GLOB]

Chris Bailey, European strategist at Raymond James in London, said it was a combination of the election and COVID-19 trade coming together.

"The election trade is that there isn't a 'blue sweep'. Those conditions where you would've perhaps favoured reflation - rising bond yields which would've supported value stocks - switched away a bit," Bailey said.

"We're now back to favouring COVID-19 trade, which is obviously beneficiaries of work-from-home and lower bond yields."

Defensive utilities (SX6P) rose 1.4%, but banks (SX7P) fell 1.0%, coming under pressure after Dutch bank ING Groep NV (AS:INGA) fell 7.1% on reporting lower-than-expected pre-tax profit.

Germany's Commerzbank (DE:CBKG) dropped 6.5% after it reported quarterly loss, as the lender undergoes a restructuring and deals with fallout from the coronavirus crisis.

Munich-based broadcaster ProSiebenSat.1 Media (DE:PSMGn) jumped 10.3% after it reinstated its outlook for the full year and returned to profit in the third quarter.

© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

UK's FTSE (FTSE) was flat, with sterling on the rise after the Bank of England increased its already huge bond-buying stimulus by a bigger-than-expected 150 billion pounds ($195 billion). (L)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.