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Europe close: Stocks stage relief rally on Evergrande news

By Alexander Bueso

Date: Friday 22 Oct 2021

Europe close: Stocks stage relief rally on Evergrande news

(Sharecast News) - European stocks finished higher on Friday with investors cheering news of an interest payment by debt-ridden China Evergrande Group and brushed aside a survey that showed growth in euro zone business activity slowed in October due to inflation fears.
The pan-European Stoxx 600 was up by 0.46% to 471.88, alongside a 0.46% gain for the German Dax to 15,542.98 while the FSTE Mibtel had edged up 0.18% to 26,571.73.

Asian shares rose on reports the world's most indebted company had wired funds for a dollar bond interest payment, just before a deadline that would have seen the property developer go into formal default.

PMI survey data showed growth in euro zone business activity slowed in October as firms face soaring costs due to supply-chain constraints, while the bloc's dominant service industry also continued to struggle as Covid-19 cases rose.

The preliminary reading for IHS Markit's composite output index for euro area manufacturing and services came in at 54.3 in October - a six-month low - which was down from a reading of 56.2 for the previous month.

Britain's FTSE 100 was up 0.20% to 7,204.55 despite an unexpected 0.2% fall in retail sales.

Richard Hunter, head of markets at Interactive Investor, said consumers continued to snub the high street "in favour of an escalating trend of socialising which has become a factor since the easing of lockdown restrictions".

"Online sales remain elevated in a post-pandemic switch in behaviour, and the widely reported fuel shortages which began in late September fed through to a 2.9% rise in sales. Attention will now begin to switch towards the festive season and whether the situation can be recovered, alongside the further pressures of supply chain blockages and labour shortages," he said.

In equity news, Swedish sports, outdoor and cargo products maker Thule Group shares rose over 9% to top the Stoxx as the company reported third quarter sales growth of 14%.

French cosmetics giant L'Oreal saw its shares up 5% gain after posting strong revenue growth on demand for its luxury lines and growth in China, while tissue maker Essity gained 5.2% after setting a new target to ramp up sales.

London Stock Exchange Group fell 6% as its computer systems suffered a technical outage preventing market data from being broadcast. In a separate statement the bourse reported a 2% rise in third quarter revenue.

French vehicle maker Renault edged up after the company said production losses this year would be far larger than previously forecast owing to a global chip shortage.

Swedish mining firm Boliden dropped 7% as its third-quarter operating profit fell below market forecasts, pressured by higher costs and lower volumes.

Airlines were lower as Morocco decided to ban travellers from the UK as British Covid cases and deaths spiked. Budget airline easyJet and British Airways owner IAG were both lower.

"The Moroccan decision to block arrivals from the UK does provide a warning shot for the travel sector, coming at a time when rising energy costs already threaten margins across the sector," said IG analyst Joshua Mahony.



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