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Flutter and Ryanair lead travel stocks
Travel and leisure index near three-month high
Fewer luxury companies with exposure to China
(Updates with new analyst comment, market close)
By Shreyashi Sanyal and Ankika Biswas
7 Nov (Reuters) – European stock markets closed at their highest level in more than seven weeks on Monday. A surge in travel and technology stocks has outweighed the drag on luxury giants, which has been influenced by Chinese stocks.
The benchmark STOXX 600 index rose 0.3%, continuing its upward trend after three straight weekly gains.
European travel and leisure stocks hit a three-month high as Flutter Entertainment Plc and Ryanair rose 4.2% and 3.8% respectively. The index closed 1.6% higher.
An arbitrator on Friday reaffirmed that Fox Corp has 10 years to exercise its option to acquire a nearly one-fifth stake in Flutter-owned gambling app FanDuel.
Irish shares surged 1.9%, lifted by Ryanair after the airline posted its biggest first-half after-tax profit in history, saying it is expected to return to pre-COVID-19 annual profit levels this year. I was.
Investor attention will focus on Tuesday’s US midterm elections, which will determine control of Congress. Republicans are gaining momentum in the polls and betting markets, with analysts expecting a split government, with the Republicans winning the House and possibly the Senate.
“One ship tends to go all the way up. If sentiment is positive for the US, European stocks tend to go higher,” said Giles Coughlan, chief market analyst at HYCM.
Meanwhile, European luxury stocks such as LVMH, Pernod Ricard and Hermès International fell between 0.7% and 1.5%.
There are mixed signs about China’s reopening. Chinese health officials reiterated their commitment to stringent control of COVID-19 over the weekend, but Chinese leaders are considering reopening with no timeline set after nearly three years of severe pandemic restrictions. ing.
“If we see positive news about COVID in China and Republicans win both the Senate and the House, it will be positive for European stocks,” Coghlan added.
The STOXX 600 Index starts November on a solid footing, supported by a better-than-expected reporting season, and expects the Federal Reserve to raise rates in smaller increments.
A survey on Monday showed euro zone investor morale improved in November. This reflects expectations that recent warmer temperatures and falling energy prices will hamper gas rationing on the continent this winter.
Among other stocks, Telecom Italia jumped 10.7%. That’s because top investor Vivendi will begin talks with Italy’s new right-wing government over a new plan to create a state-owned broadband company.
UniCredit fell 1.9%, and GSK said blood cancer drugs were on the rise after reports of heightened tensions between the European Central Bank’s supervisory authorities and Italian banks over funding plans and a presence in Russia. It dropped 4.7% after failing late-stage research. (Reporting by Shreyashi Sanyal and Ankika Biswas of her in Bangalore; Additional reporting by Joice Alves; Editing by Uttaresh.V and Josie Kao)