European stocks rise on strong SAP, LVMH results – Reuters

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 29, 2021. REUTERS/Staff

  • STOXX 600 hits two=week high
  • U.S. inflation rises solidly in September
  • LVMH higher after Q3 results
  • Apple suppliers fall on iPhone report

Oct 13 (Reuters) – European stocks rose on Wednesday as upbeat earnings forecast from German software group SAP and robust quarterly sales for French luxury goods maker LVMH helped soothe worries about inflation.

After some weakness at open, the pan-European STOXX 600 index (.STOXX) hit two-week highs, and closed up 0.7%, as did the German DAX (.GDAXI). France’s CAC 40 (.FCHI) rose 0.8%.

A decline in banks (.SX7E) led to UK’s FTSE 100 (.FTSE) gaining only 0.2%, while lender heavy indices of Spain (.IBEX) and Italy (.FTMIB) lagged. JPMorgan (JPM.N) kicked off third quarter earnings in the United States with earnings trumping expectations, but its shares and the broader banking sector there (.SPXBK) fell. read more

Europe’s most valuable tech company SAP (SAPG.DE) rose almost 4% 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. read more

French luxury goods maker LVMH (LVMH.PA) added 3.2% as sales at its fashion and leather goods division rose strongly in the third quarter but overall revenue growth in Asia and the United States eased after a stellar first-half performance. read more

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

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

“Inflation is the main factor capable of shifting stock markets in the upcoming months,” said Alberto Matellán, chief economist at Spanish insurer MAPFRE Inversión.

“The recent rebound is due to external shocks… By responding to external shocks, the spike in inflation should be temporary and subside when these shocks do.”

Worries about central banks exiting their pandemic-era stimulus, a global energy crunch and signs of elevated prices have all dampened the outlook for economic recovery, with the STOXX 600 cutting monthly gains to trade up about 1% after stumbling 3.4% in September.

Third-quarter profit for STOXX 600 companies is seen rising 46.7%, as per Refinitiv IBES data, after a 152.6% jump in the previous quarter, with energy and industrial companies driving the biggest gains.

Earnings estimates have picked up gradually heading into earnings season

Apple Inc (AAPL.O) suppliers including STMicroelectronics and AMS slipped after Bloomberg reported that iPhone 13 production is likely to be slashed. read more

Britain’s biggest housebuilder Barratt Developments (BDEV.L) added 6.3% after it said that forward sales for the past three months had risen above pre-pandemic levels. read more

Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Editing by Sriraj Kalluvila and Ed Osmond

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