European shares advance as LVMH and SAP figures offset inflation fears

European stocks advanced Wednesday as German software giant SAP and French luxury goods group LVMH reported solid quarterly figures, though gains were contained as inflation fears kept many investors on the sidelines.

After some weakness at the open, the pan-European Stoxx 600 index hit two-week highs, and closed up 0.7 per cent, as did the German DAX. France’s CAC 40 rose 0.8 per cent.

DUBLIN

The Iseq overall index gained 0.7 per cent to 8,404.12, with Paddy Power owner Flutter Entertainment standing out among advancing large-caps, gaining 2.7 per cent to €170.85.

Kingspan added 2.7 per cent to €89.68, as Bank of America analysts highlighted the insulation group will be a key beneficiary from global efforts to reduce carbon emissions.

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Kerry Group rose as much as 1.7 per cent in early trading as the taste and nutrition group outlined medium-term growth targets. However, the stock subsequently pulled back from its highs to close 0.2 per cent higher at €117.35.

Housebuilders were also in focus, with Cairn Homes up 1.4 per cent and Glenveagh Properties edging 0.7 per cent higher, as sector followers cheered strong forward sales figures from the UK's biggest housebuilder, Barratt Developments.

LONDON

London’s FTSE 100 rose, lifted by gains in shares of homebuilders, but worries about a possible early interest rate hike by the Bank of England kept sentiment in check.

Homebuilders jumped as much as 3.9 per cent, their biggest intraday rise since April last year, with Barratt up 6 per cent after it reported sales above pre-pandemic levels and said it was on track to deliver its 2022 and medium-term targets.

UK fund manager Man Group rose 7.6 per cent and was the top gainer after its assets under management rose to a record $139.5 billion (€161.5 billion) in the third quarter.

In volatile trade, SoftBank-backed online retailer THG dropped 2.9 per cent, extending losses after it held a presentation on Tuesday to reassure investors it could reverse a recent slide in its share price.

Just Eat Takeaway shares declined 1.7 per cent to the lowest since February 2019 after third-quarter orders failed to meet analyst expectations.

EUROPE

Europe’s most valuable tech company SAP rose almost 4 per cent after it raised its full-year outlook for a third time following a strong quarterly showing as more customers shift their IT operations to the cloud.

French luxury goods maker LVMH added 3.2 per cent as sales at its fashion and leather goods division rose strongly in the third quarter but overall revenue growth in Asia and the US eased after a stellar first-half performance.

Also helping sentiment was data that showed China’s export growth unexpectedly accelerated in September.

Meanwhile, inflation data from the United States showed a solid rise in September, keeping the Federal Reserve on track to start tapering monetary stimulus in November. US federal funds futures priced in an interest rate hike by September, 2022 after the data.

Apple suppliers including STMicroelectronics and AMS slipped after Bloomberg reported that iPhone 13 production is likely to be slashed.

NEW YORK

The Nasdaq rose on Wednesday as investors moved into the perceived safety of technology stocks amid concerns about rising inflation

Mega-caps growth names including Amazon, Google-parent Alphabet, Microsoft and Tesla rose.

Banking group JP Morgan Chase fell and weighed the most on the Dow and the S&P 500 despite its third-quarter earnings beating expectations, helped by global dealmaking boom and release of more loan loss reserves.

Peers Bank of America, Citigroup, Wells Fargo and Morgan Stanley will report results on Thursday, while Goldman Sachs will publish earnings on Friday.

BlackRock rose after the world’s largest investment manager beat quarterly profit estimates as an improving economy helped boost its assets under management, driving up fee income.

Among other stocks, Apple fell on the Bloomberg report. Delta Air Lines warned of a pretax loss for the fourth quarter due to a sharp rise in fuel prices, sending its shares down. – Additional reporting: Reuters