By Peter Nurse
Investing.com - European stock markets pushed higher Tuesday, rebounding after the previous session’s sharp losses, helped by a strong quarterly update from Swiss banking giant UBS.
At 3:45 AM ET (0845 GMT), the DAX in Germany traded 1% higher, the CAC 40 in France rose 1.3% and the U.K.’s FTSE 100 climbed 1.1%.
Tuesday’s gains only partially recover some on Monday’s rout, when the DAX closing down 2.6%, the CAC 40 down 2.5% and the FTSE 100 2.3% lower, amid fears the latest surge of Covid-19 cases, led by the highly contagious delta variant, will prompt governments to resume tight lockdowns and curb economic activity.
These markets had rallied strongly in the first half of the year as investors bet that the rollout of Covid-19 vaccination programs would help economies to recover strongly as mobility restrictions were lifted. However, the increase in new cases, firstly in Asia but increasingly in Europe and the U.S., has changed that narrative.
Helping the tone Tuesday was the news that UBS (SIX:UBSG) reported a 63% jump in quarterly net profit to $2 billion, up from the $1.23 billion reported for the same period last year, helped by what the Swiss wealth manager described as “favorable” market conditions. UBS stock rose over 4%.
EasyJet (LON:EZJ) stock climbed 1.6% after the budget airline announced plans to fly 60% of its pre-pandemic capacity in the July-September period, a big jump from the 17% in the previous quarter, as travel appetite builds even as Covid cases rise again.
Remy Cointreau (PA:RCOP) stock rose 0.8% after the French spirits group reported a more than doubling of sales in the first quarter, as bars and restaurants reopened in Europe while demand remained strong in China and the United States.
LVMH (PA:LVMH) stock rose 1.6% after the French luxury group agreed to buy a 60% stake in the streetwear brand Off-White.
On the flip side, Electrolux (ST:ELUXb) stock fell over 8% after the Swedish home appliances maker warned that supply chain issues would worsen this year, affecting output levels.
On the economic data front, German producer prices rose 8.5% on the year in June, at a 40-year high, and sure to provide food for thought for European Central Bank members when they meet on Thursday.
Elsewhere, oil prices edged higher Tuesday, steadying after the previous session’s sharp selloff on the back of worries that increased Covid cases will hit the short-term demand for energy just as a group of top producers agreed to increase supply.
Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.
By 3:45 AM ET, U.S. crude futures traded 1.2% higher at $67.17 a barrel, after dropping more than 7% Monday, their worst session since September, while the Brent contract rose 1.3% to $69.54, after falling 6.8% to an eight-week low.
Additionally, gold futures rose 0.4% to $1,815.45/oz, while EUR/USD traded 0.1% lower at 1.1782.