European Stocks Gain; Entain Soars on DraftKings Interest

European Stocks Gain; Entain Soars on DraftKings Interest

European stock markets traded higher Wednesday, helped by M&A action in the leisure sector and an easing of tensions around embattled Chinese property group Evergrande , ahead of a key Federal Reserve meeting.

At 4 AM ET (0800 GMT), the DAX in Germany traded 0.2% higher, the CAC 40 in France rose 0.7% and the U.K.’s FTSE 100 climbed 0.7%.

Concerns that China Evergrande Group , the country’s second largest property developer, will default on a debt pile that accounts for over 10% of all Asian high-yield debt have recently pressured equity markets around the globe.

Some of these worries were lifted Wednesday after Evergrande’s main unit, Hengda Real Estate Group, said it would make a bond interest payment on Thursday after private negotiations with bondholders.

This news doesn’t end the speculation of default, with Evergrande having an $83.5 million interest payment due on Thursday and a second $47.5 million interest payment due next week, but it boosted confidence of avoiding widespread market disorder.

In Europe it was the travel and leisure sector leading the way, with Entain  stock jumping 7.4% to a new all-time high after the U.K.-based gambling firm revealed a $22 billion takeover proposal from U.S.-based DraftKings .

UBS Group  and HSBC  also posted gains Wednesday despite data from Morningstar showing these investment banks, along with fund giant BlackRock , were among the largest buyers of Evergrande debt.

Elsewhere, the Munich-based Ifo institute cut its forecast for German growth this year to 2.5% from 3.3%, reflecting the impact of Delta-variant Covid-19 and supply chain disruptions for local industry. However, it raised its estimate for growth next year to 5.1% from 4.3%.

The FTSE MIB climbed up by  0.60% to 25,501.00. In the cash markets, the DAX  Germany was trading up 0.55%  to 15,432.65. CAC 40  in France  Fell by 1.15% to 6,620.37 while the FTSE 100  in the U.K. were up  by 1.13% to 7,060.35. ,at the time of writing.

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