FRANKFURT: European equities ended higher on Tuesday, supported by a raft of positive corporate catalysts that eased investor concerns over recent trade tensions, while shares of Puma jumped after the sportswear maker sold a stake to China’s Anta Sports.
The gains underscore how investors are leaning on company-specific factors to guide market sentiment amid an increasingly uncertain macroeconomic environment.
The pan-European STOXX 600 benchmark was up 0.6 percent at 613.11 points and touched its highest in over one week. Banks led sectoral gains with a 1.8 percent rise and hit their highest since May 2008, with HSBC up 2.8 percent as it briefly hit a USD300 billion market value. “The fundamentals for banks have really improved. We expect loan growth to pick up and we could see further positive earnings surprises from the sector this year,” said Ciaran Callaghan, head of European equity research at Amundi.
Puma’s shares rose 9 percent and hit their highest level since last March, following a deal by Anta Sports Products to buy a 29.06 percent stake in the German company for 1.5 billion euros (USD1.8 billion). The deal is expected to help Puma increase its sales in the lucrative Chinese market.
“At this point in the cycle, we can expect dealmaking to pick up. Balance sheets are strong and management teams are looking to see where incremental growth can come from,” Callaghan added.
LVMH closed up 0.2 percent. Its US-listed shares were last up 0.4 percent in choppy trading after the luxury giant said it sold more goods than analysts expected in the fourth quarter, boosting hopes of a luxury sector rebound even as trade tensions, a weaker dollar and high gold prices hit its margins.
Among others, Swiss pharmaceutical firm Roche said a phase II clinical trial of its experimental obesity drug CT-388, a once-weekly injection, had delivered positive results. Shares struggled for direction for most of the session and were last flat.
Separately, Indian Prime Minister Narendra Modi said that India and the European Union have finalised a long-pending landmark trade deal, which also included India cutting steep tariffs on automakers.
However, auto stocks were down 0.8 percent as analysts were sceptical about the boost it could give to European brands that are likely to be faced with stiff competition from local carmakers.
Investors are also concerned about the long-term implications of US tariff threats for the global trade order, after US President Donald Trump said he would hike duties on South Korean autos and other imports, citing delays in implementing the pact signed last year.
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