PARIS: European stocks surged on Wednesday to their biggest daily gain in two months, buoyed by a batch of strong fourth-quarter trading updates, while Volkswagen surged on the possible listing of its luxury brand Porsche AG.

The pan-European STOXX 600 climbed 1.7% with automakers leading gains with a 4.0% jump.

Volkswagen was among the top boosts to the index, up 6.1%, while its biggest investor, holding company Porsche SE jumped 8.2%. The two were also the top performers on the German benchmark.

Traders pointed towards a Reuters story fuelling hopes there could be news on a potential listing of Porsche AG at Volkswagen’s annual press conference scheduled for March 15.

Broader European sectors were buoyed by optimism over strong earnings in French funds manager Amundi and Norway’s Equinor.

Amundi gained 3.9% after saying it exceeded its 2022 strategic targets and logging a strong rise in earnings.

Equinor firmed 1.4% after promising to pay out $10 billion to shareholders this year and reporting record fourth-quarter pretax profits.

The positive readings helped offset jitters over upcoming U.S. inflation, where a strong reading could further unsettle stock markets.

“The mood is of a more optimistic wait-and-see attitude ahead of a fresh snapshot of U.S. prices due tomorrow,” said Hargreaves Lansdown analyst Susannah Streeter.

“Although the ECB is still lagging behind in monetary policy tightening, the music is changing to a slightly more hawkish tune... also, investors are waiting for a raft of corporate earnings in Europe,” Streeter added.

The STOXX 600 has regained about 0.6% of its value this month after shedding 4% in January as traders digest surging inflation readings, hawkish central bank comments, and a slew of earnings numbers.

Meanwhile the ECB will do everything necessary to steer inflation back to its 2% target over time, Bank of France Governor Francois Villeroy de Galhau said on Tuesday.

Technology stocks rose 2.9% as pressure from high bond yields eased.

Banks added 0.9%, hovering around their highest level since 2018, given that the sector stands to benefit from a higher rate environment.

Adyen NV rose 11.5% after the Dutch payments company said prospects for its business remained strong as it reported a 51% jump in core earnings. Danish jewellery maker Pandora jumped 7.9% after saying sales will improve this year and lifted its 2023 revenue target.

Danish stone wool maker Rockwool International jumped nearly 20%, topping the STOXX 600 after it posted strong quarterly results and flagged positive future earnings.

Comments

Comments are closed.