European shares take strength from banks, Adidas hits record high
Reuters
Published May 03, 2019 06:38AM ET
European shares take strength from banks, Adidas hits record high
By Aaron Saldanha and Medha Singh
(Reuters) - European shares rose on Friday, propped up by bank stocks amid a slew of corporate earnings reports, as the regional index licked its wounds a day after its worst loss in six weeks.
The pan-European STOXX 600 index was up 0.4 percent at 0903 GMT.
"Today you see partly a correction from the yesterday's move and hopes about a good U.S. jobs report," said Teewe Mevissen, senior macro strategist at Rabobank, referring to U.S. non-farm payrolls data for April due later on Friday.
A Reuters poll forecast a net addition of 185,000 new jobs.
(Graphic: YTD Comparison between select European/Eurozone stock indexes as at 0808 GMT, May 3, 2019, https://tmsnrt.rs/2Ljy7Uq)
The STOXX 600 has significantly underperformed the Euro-zone stocks index and Euro-zone blue-chips in the quarter to date, by about 1.21 percentage points and 1.67 percentage points, respectively.
Risks for equities going ahead "are more downward than upward," said Rabobank's Mevissen.
Bank stocks were up 0.9 percent, aided by a 2.7 percent gain in the London-listed shares of HSBC Holdings (LON:HSBA) PLC after the lender beat quarterly profit estimates, bolstered by a surge in income from its core Asian business.
Societe Generale (PA:SOGN) surged 4 percent to lead the banking index's gains. The French lender's capital buffer was stronger than expected, helping investors shrug off a decline in quarterly net profit.
The personal and household goods sector rose 1.1 percent.
Adidas (DE:ADSGN) hit a record high and was trading about 6.6 percent higher. The sportswear maker clocked a rise in quarterly net profit thanks to high-margin ecommerce even as overall sales growth slowed.
Basic resources stocks gained 1 percent as copper prices rebounded. London-listed Anglo American (LON:AAL) Plc tacked on 1.7 percent as Credit Suisse (SIX:CSGN) upgraded the miner to "outperform" from "neutral" and raised its price target on the stock.
Air France-KLM tumbled 4.3 percent as the Franco-Dutch group blamed higher fuel costs and tough price competition for its first-quarter loss although it said pressure would ease in the rest of the year.
Reinsurer Swiss Re AG slid 2.6 percent on an unexpected fall in quarterly net profit as claims from large losses exacted a heavy toll. Its stock was the biggest weight on the STOXX 600.
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Auto-makers and parts manufacturers also tempered broad gains as they slid 0.4 percent. Pirelli dropped 1.2 percent after Morgan Stanley (NYSE:MS) cut its price target on the Italian tire maker's stock.
Written By: Reuters
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