Europe close: Tech stocks push markets higher
By Benjamin Chiou
Date: Thursday 28 Nov 2024
(Sharecast News) - European stocks finished with solid gains on Thursday despite political uncertainty in France, with tech stocks among the day's best performers.
On a day where trading volumes were said to be low due to the Thanksgiving holiday Stateside, the Stoxx 600 index finished 0.5% higher at 507.30, rebounding after two days of losses.
"It is getting to the point where European markets only make gains when the US is out of the picture. Europeans always seem to take over some of America's positive outlook on life on days like today, with indices moving modestly higher," said Chris Beauchamp, chief market analyst at IG.
Even the Cac 40 in Paris managed to finish with gains despite the ongoing political crisis weighing on sentiment. Far-right anti-immigrant leader Marine Le Pen has threatened to collapse Prime Minister Michel Barnier's government in a no-confidence vote over his budget measures, which include cuts to spending and higher taxes.
The concerns dampened bonds on Thursday with 10-year yields briefly hitting parity with Greece's for the first time. French 10-year bond yields went on to touch 3.022%, before easing back to 2.978%.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The worsening political scene in France and the widening yield gap between France and Germany could limit the single currency's upside potential, along with clashing opinions from European Central Bank members about how fast the bank should cut rates."
In other economic news, the European Commission's eurozone Economic Sentiment Indicator rose 0.1 points to 95.8, surprising economists who had predicted a fall to 95.1. Meanwhile, German inflation rose to 2.2% for November, according to a flash estimate from the Federal statistics office, up from 2% in October and 1.6% in September.
Market movers
The high riser of the day was UK insurer Direct Line rocketed 41% after news overnight that rival Aviva had tabled a £3.3bn offer - which was rejected.
Remy Cointreau reversed morning losses to finish higher despite the drinks maker reporting a 17.6% fall in half-year operating profit and guiding to a 15-18% plunge in full-year organic sales. The stock closed up 3%, but still remains down nearly 50% so far this year.
Chip stocks gained after a report that the incoming US administration's China chip curbs could be less severe than expected. Shares in sector heavyweights ASM International, ASML and BE Semiconductor all made gains.
Supermarket stocks in London were performing well, after JPMorgan Cazenove double upgraded Sainsbury's and Tesco from 'underweight' to 'overweight'. However, sector peer Ocado Group fell after the grocery logistics tech firm announced that retailer Morrisons would cease using one of its customer fulfilment centres for deliveries.
Also in the UK, International Distribution Services shares were higher after a BBC report stated Czech billionaire Daniel Kratinsky's EP Group was close to finalising a deal to buy the parent company of Royal Mail after making extra concessions to get his offer accepted.
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