Europe close: Markets mostly higher, luxury stocks fall in Paris

27th Aug 2024 15:49

(Sharecast News) - After a brief stint in negative territory, European stocks inched higher on Tuesday with the Stoxx 600 resuming its recent upward trajectory, though gains were only modest.

The Stoxx 600 index finished the day up 0.16% at 518.88, having now risen in 13 of the past 16 trading sessions since hitting a six-month low on 5 August.

Almost every major index across the continent was putting in moderate gains of 0.2-0.5%, with the exception of the Cac 40 in Paris, which finished down 0.3% on the back of heavy falls in the luxury sectors. US markets also opened in a mixed fashion on Wall Street.

Axel Rudolph, senior technical analyst at IG, said the recent rally in equity markets is "slowing down" ahead of eagerly awaited results from semiconductor giant Nvidia on Wednesday.

"Most US equity indices continue to gingerly advance ahead of Nvidia's second quarter earnings on Wednesday. With the chipmaker's stock contributing around 5% to the S&P 500's 18.6% year-to-date gains, its results will be closely watched by investors and will likely have a significant impact on not just the S&P 500 but also other global stock indices," he said.

Also limiting upside in Europe was a deteriorating outlook for the German economy, as confirmed by a consumer survey released by GfK and the Nuremberg Institute for Market Decisions on Tuesday.

The forward-looking consumer sentiment index for September fell to -22 from a revised -18.6 in August, coming in below expectations for a reading of -18.2. Rolf Buerkl, consumer expert at NIM, said that slightly rising unemployment rates, an increase in corporate insolvencies and staff reduction plans at various companies in Germany are causing employees to worry about their jobs.

Meanwhile, the final reading of second-quarter German GDP was revised higher, with the year-on-year change improving to 0% from -0.1% in the second quarter, better than the flash reading of -0.1% released last month. Quarter-on-quarter growth however remained at -0.1%, after the economy expanded by 0.2% in the first three months of the year.

Market movers

Bunzl was a high riser in London, jumping around 8% to a record high after the distribution and outsourcing company upgraded its full-year guidance and launched a share buyback programme.

Zurich airport operator Flughafen Zuerich fell 3% after first-half results came in below expectations, even as passenger traffic forecasts for the full year were lifted.

French luxury stocks were out of favour, with Hermes, LVMH and EssilorLuxottica among the heaviest fallers on the Cac 40.

German drug discovery and development company Evotec surged 9% as the stock continues to recover after a battering earlier this month after announcing a round of job cuts and the exit of its gene therapy operations.

Also in Frankfurt, commercial vehicle maker Daimler Truck was in reverse after Goldman Sachs cut its recommendation on the stock from 'buy' to 'neutral'.

Danish brewer Carlsberg rose after coming one step closer to taking over London-listed soft drinks group Britvic, with 83% of the latter's shareholders voting in favour of the deal.