European Shares Extend Recovery Rally As Oil Stocks Lead
European shares edged higher on Tuesday as investors shifted from worrying about a trade war to focusing on a corporate earnings season expected to deliver solid results.
The pan-European STOXX 600 index rose 0.4 percent to a 2 1/2-week high, scoring its sixth straight day of gains as energy shares supported the market, while political bickering in the UK kept the FTSE up 0.1 percent, slightly behind.
Fading concern over trade helped push Wall Street higher for a second day on Tuesday. It’s more of an absence of bad news rather than outright positive news that has driven the trade story over the last few days.
Oil stocks .SXEP were the biggest boost to the STOXX index, rising 1.4 percent. Crude prices climbed on concern over potential supply shortages as Norwegian oil workers prepared to strike later in the day.
Industrials stocks like Siemens, Deutsche Post and Safran, among the worst-hit by news of tariffs, also boosted the European index. Trade-sensitive luxury stocks Kering and LVMH extended their recovery rally. Analysts have been revising their earnings expectations higher for the STOXX 600 before Europe’s earnings season kicks off in earnest. STOXX earnings are expected to have risen more.
On Tuesday however disappointing results caused the most eye-catching moves. Shares in interdealer broker TP ICAP sank 35.9 percent to a two-year low, suffering their worst day ever. The company announced its CEO would depart and warned on profit, blaming Brexit-related costs.
Airbus shares rose 4 percent after Bank of America Merrill-Lynch added the stock to its “Europe 1” list of preferred stocks.
Trade Suggestion Sell STOXX 50 At: 3432, Take Profit At: 3427, Stop Loss At: 3435