At the auctions on Tuesday, the key exchange indicators of Western Europe are effectively increasing amid rising prices for securities of commodity companies and automakers. The tangible rise in these market sectors was due to positive sentiment in Asia, where the stock market soared on news of the easing of restrictive measures related to the COVID-19 epidemic.
The composite index of the leading European companies STOXX Europe 600 increased by 0.63% - up to 417.70 points. Confident growth of the indicator is recorded for the third consecutive session.
The highest results in the STOXX Europe 600 index were shown by the shares of the British manufacturer of aircraft engines Rolls-Royce (+5.9%) and the Italian company producing automotive components Faurecia SE (+5.7%). The list of declines was headed by the securities of the British utility companies Pennon Group (-6.1%) and Severn Trent (-4.8%).
The UK FTSE 100 soared 0.86%, the French CAC 40 rose 1.4% and the German DAX jumped 0.81%.
Rising and Falling Leaders
Hoping for a recovery in demand from China - the main consumer of metals - sub-indices of the oil and gas and mining sectors of Europe instantly soared by 1.9% and 3.2%, respectively on Tuesday.
The day before, China lifted tough coronavirus restrictions amid reports from the leadership of Shanghai and Beijing that there were no cases of COVID-19 infection for the first time since February.
In addition, the Chinese authorities have reduced the quarantine time for tourists arriving in the country to 7 days from 14.
On positive news from China, the value of securities of European luxury retail companies, a significant part of whose income comes from this region, has also risen sharply. Thus, the share price of the French company LVMH - a well-known manufacturer of luxury goods under the trademarks Christian Dior, Louis Vuitton, Hennessy and others - increased by 1.4%. At the same time, quotes of the Swiss Richemont increased by 2.7%.
The market capitalization of French auto parts company Valeo soared 3.1% on news of a major supply deal with BMW.
The value of securities of the German automotive giant Volkswagen increased by 2.8%. According to German media reports, the company is close to closing a deal to sell a minority stake in its US business to German industrial conglomerate Siemens. According to experts, the value of the deal could reach more than $2 billion. Siemens quotes jumped 1.2%.
The market capitalization of the Dutch chemical company AkzoNobel sank more than 3% on the news of the appointment of Gregoire Poux-Guillaume as the company's new chief executive in early November.
Spain's largest oil and gas company, Repsol SE, rose 2.4%. The day before, Repsol signed an annual contract for the supply of electricity from renewable sources by the American Kraft Heinz.
The share price of the world's largest mining company BHP Plc rose 3.3% on the announcement of plans to spend about $4 billion to reduce greenhouse gas emissions by 2030.
Current market situation
Investors were focused on the annual forum of the European Central Bank, held in the city of Sintra (Portugal).
As part of the three-day event, speeches by representatives of the ECB on the fight against record inflation levels were planned.
ECB President Christine Lagarde set to speak.
At the same time, disappointing internal statistics on the states of the Euroregion turned out to be an important downward factor influencing European indicators. Thus, the consumer sentiment index in Germany fell to -27.4 in June from -26.2 in May amid the struggle of local consumers with a significant increase in prices. The resulting figure was a record low in the history of observations.
Meanwhile, the consumer confidence indicator in France sank to 82 points in June from 85 in May, updating the low for the last nine years. At the same time, market analysts predicted a drop in the index to only 84 points.
Trading results the day before
European stock indicators showed mixed trends on Monday amid investors waiting for new statements from Lagarde on the further monetary policy of the ECB.
As a result, the composite index of leading European companies STOXX Europe 600 increased by 0.52% to 415.09 points.
Britain's FTSE 100 rose 0.69% to 7258.32, the French CAC 40 shed 0.43% to close at 6047.31 and the German DAX gained 0.52% to jump to 13186.07.
Shares of mining companies showed the sharpest rise on Monday. Thus, BHP quotes rose by 3.3%, Anglo American gained 2.2%, Antofagasta - 3.3%, Rio Tinto - 3.2%, and Glencore - 1.5%.
No less spectacular growth was demonstrated by the securities of the French representatives of the automotive industry. Thus, quotes of Renault increased by 2.3%, and Michelin - by 0.8%.
Dutch multinational conglomerate Prosus soared 15.7% as its South African parent company backtracked on a promise not to sell shares to China's Tencent. The proceeds from the securities are expected to support a major share buyback program.
Quotes of the Italian bank Intesa Sanpaolo SpA rose by 0.7% on news that the company is launching a buyback program totaling 3.4 billion euros.
The market capitalization of the British consulting company Aquila Services Group Plc increased by 7.7%. For the past fiscal year ending in March, the organization received pre-tax profits of $881,200 versus $276,000 a year earlier.
At the same time, Italian insurers Assicurazioni Generali (-3.0%) and gas company Italgas (-1.4%) showed the lowest results among securities traded on European stock exchanges.
