Markets

Travel and leisure stocks drive European shares to record high

Asian stocks traded sideways as concerns over the spread of the Delta variant

Tue Aug 10 2021 - 09:52

European stocks hit a record high on Tuesday, extending gains to a seventh straight session, boosted by travel and leisure companies as investors took comfort from strong earnings reports.

The pan-European Stoxx 600 index gained 0.2 per cent by 7.17am, notching an all-time high of 471.67 points.

The travel and leisure sector was the top percentage gainer as Flutter Entertainment rose 4.8 per cent after the world’s largest online betting group said its first-half results exceeded estimates and it expects US business to turn a profit by 2023.

Berlin-based meal-kit firm HelloFresh added 1 per cent after it reported strong second-quarter growth, as a rise in customers and continued high order rates bumped up sales.

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Dutch food ingredients group Corbion tumbled 8.1 per cent to the bottom of Stoxx 600 after it cut its full-year adjusted EBITDA margin outlook.

Asian stocks traded sideways as concerns over the spread of the Delta variant and expectations of earlier tapering by the Federal Reserve offset strong corporate earnings, while gold and oil recovered after their sharp falls.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.17 per cent higher in mid-afternoon after trading most of the day in slight red territory, with China’s blue chip index CSI300 also recovering to be 0.43 per cent higher, while South Korea’s KOSPI index was 0.64 per cent weaker.

“Equities have pretty much tracked sideways, but commodities are slightly weak and that’s partly reflecting COVID-19 uncertainty because cases seem to be increasing and background concerns of a slowdown in China,” said TD Securities Asia-Pacific strategist Prashant Newnaha.

In Hong Kong, the Hang Seng Index was 0.78 per cent higher, while the Shanghai Composite traded 0.42 per cent higher, and Japan’s Nikkei was up 0.22 per cent.

Gold prices also recovered, after touching a four-month low on Monday as strong US jobs data bolstered expectations of an early tapering of the Federal Reserve’s economic support measures.

Officials also said inflation was at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.

“That probably weighted on equities slightly,” added Newnaha.

China on Monday reported more Covid-19 infections in what seems to be its most severe resurgence of the disease since mid-2020, as some cities added rounds of mass testing in a bid to stamp out infections.

Oil prices recovered on Tuesday after falling as much as 4 per cent in the previous session, which extended last week’s steep losses amid a rising US dollar and concerns that new coronavirus-related restrictions in China could slow a global revival in fuel demand.

US crude oil futures were trading at $66.98 per barrel, up $0.5 or 0.75 per cent. Brent crude was at $69.37, up $0.33 or 0.48 per cent higher.

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