Europe open: Strong corporate earnings buoy shares
UniCredit
€8.88
19:00 04/02/21
Stocks on the Continent are bounding higher, with traders referencing strong company earnings as the main driver behind share price gains.
In the words of Chris Beauchamp at IG: "it remains encouraging to see stock markets hold their ground despite a drumbeat of trade war headlines of late.
"Earnings season is shaping up very well indeed, which accounts for why US equities remain comfortably ahead of the likes of Europe, but a rising tide lifts all boats and will reinforce the impression that this economic recovery and its associated bull market has further to run. Reasons to be cautious still abound however [...]."
As of 1103 BST, the benchmark Stoxx 600 was ahead by 0.55% or 2.14 points to 390.80, alongside an advance of 0.90% or 113.73 points to 12,711.56 for the German Dax and a gain of 0.73% or 39.80 points to 5,516.98 for the Cac-40.
Basic Resources were faring best within the Stoxx 600, with the Pan-European gauge's corresponding sector subindex adding 2.17% or 9.79 points to 462.68.
In parallel, euro/dollar was ahead by 0.29% at 1.1586.
Front month Brent crude oil futures meanwhile were advancing another 1.245% to $74.73 a barrel on the ICE, a day after US sanctions were reimposed on Iran.
German industry was again in the spotlight on Tuesday, following the release of figures from the Ministry of Finance showing a 0.9% drop in industrial output month-on-month (consensus: -0.5%).
Production of motor vehicles and other transport equipment was the weakest link in the proverbial chain.
That prompted economists at Barclays Research to say that "This could be a first sign that concerns about trade war are holding activity back.
"[...] Notably, these negative effects materialised in the data, despite tight labour market conditions and anticipated fiscal stimulus."
Elsewhere, some market participants were also taking note of an article in the European Central Bank's most recent monthly bulletin according to which the recent pick-up in salary growth within th single currency bloc was likely signaling that higher inflation lay ahead.
In corporate news meanwhile, shares of Unicredit were up by nearly 3% on the heels of a better-than-expected report on second quarter earnings.