Europe midday: Stocks boosted by earnings, easing China-US tensions
European shares were still in the black by midday on Tuesday after positive mood music from the US-China leaders meeting and strong corporate earnings.
Stocks continued to hit record highs, with the pan-European Stoxx 600 index up 0.4%, while Germany’s DAX and France’s CAC 40 also pushed into new high territory, up 0.5% and 0.4%, respectively. Investors were cheered by the three-hour meeting between US President Joe Biden and his China counterpart Xi Jinping.
Sentiment was also helped by ECB President Christine Lagarde reiterating her pushback against expectations for tighter monetary policy.
Investors were also digesting the latest data from Eurostat, which showed the Eurozone economy continued to grow in the third quarter, although at a notably slower pace than previously seen.
Seasonally-adjusted GDP rose 2.2% in the Eurozone compared with the previous quarter, when it increased 2.1%.
Year-on-year, Eurozone GDP was ahead 3.7% compared to the second-quarter’s 14.2% hike, and up 3.9% across the entire EU. Both the quarterly and annual rates were in line with consensus.
Among the 19 Eurozone countries, Germany - the bloc’s biggest economy - saw GDP rise 1.8% compared to growth of 1.7% in the previous quarter. Spain’s GDP grew by 2.0% compared to 1.1% in the second quarter, while France saw GDP rise 3.0% from 1.3%. Italy, however, was marginally down on the previous quarter, with growth easing to 2.6% from 2.7%.
Employment, meanwhile, rose 0.9% in both the Eurozone and EU in the third quarter. The number of employed persons increased 0.7% in the Eurozone in the second quarter, and by 0.8% across the wider bloc.
Year-on-year, employment accelerated 2.0%, ahead of analyst forecasts for 1.6%, from an upwardly revised 1.9% in the second quarter.
In equity news, telecom giant Vodafone gained after strong quarterly results while Diageo ticked higher after raising its medium-term sales growth guidance, driven by market share across its operating regions.
Shares in Dutch tech investor Prosus rose after the company forecast higher profit for the first half of 2022 as it gained proceeds to the tune of $12.3bn from selling part of its stake in Tencent.
Shares in Portugal's Jerónimo Martins plunged after the Pingo Doce supermarket chain’s second largest shareholder Asteck sold its entire 5% stake in the company.