Finance

European stocks rebound after worst selloff of 2021 By Reuters

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 19, 2021. REUTERS/Staff

By Sruthi Shankar

(Reuters) – European stocks bounced back on Tuesday after their worst selloff this year in the previous session, helped by a handful of positive corporate earnings and production updates from miners.

The pan-European index rose 0.8% after worries about the fast-spreading Delta variant and slowing economic growth knocked 2.3% off the index on Monday.

Miners, among the sectors that bore the brunt of the bruising selloff, rose 1.7% after BHP Group (NYSE:) and Anglo American (LON:) provided upbeat production numbers.

Swiss bank UBS climbed 4.6% after it posted a 63% jump in second-quarter net profit, helped by a booming wealth management business. Peers Credit Suisse (SIX:) and Julius Baer also rose.

“Although the U.S. economy is in a slowdown phase and we expect European growth to peak this summer, we continue to favour risk assets over a 12-month horizon,” analysts at BCA Research wrote in a note.

“The UK is a case in point — broad-based vaccinations are keeping hospitalisation rates there low despite the sharp jump in COVID-19 infections. Thus, the market impact of the Delta variant may ultimately prove fleeting in developed economies.”

British airline easyJet (LON:) gained 1.9% after saying it plans to fly 60% of its pre-pandemic capacity in the July-September period.

Europe’s travel & leisure index has fallen sharply from its April record highs, with travel-related stocks getting hit by soaring infections across the continent and last-minute changes to travel rules.

The U.S. government on Monday issued the highest warning against travel to the United Kingdom.

Graphic: Europe’s travel & leisure index drops 17% from April peak – https://fingfx.thomsonreuters.com/gfx/mkt/klpykeedbpg/Pasted%20image%201626763063268.png

Among other stocks, Norwegian telecoms operator Telenor rose 2.6% after it raised its full-year revenue outlook.

French spirits group Remy Cointreau inched down 0.2% even as its first-quarter organic sales more than doubled after bars and restaurants reopened in Europe.

Analysts expect profit at STOX 600 companies to jump 108.6% in the second quarter versus a year ago, as per Refinitiv IBES estimates, as COVID-19 restrictions eased across Europe.

Sweden’s AB Volvo fell 3.8% as it warned of further production disruptions and stoppages this year due to chip shortages.

Home appliances maker Electrolux tumbled 9.7% after it reported a lower-than-expected second-quarter operating profit and warned global supply chain woes would worsen in coming months.

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