European stocks inch up as tech, mining shares offset losses in Ericsson

Oct 19 (Reuters) – Europe’s essential inventory index edged increased on Tuesday as good points in mining and know-how shares helped offset losses in Sweden’s Ericsson, which reported successful from world provide chain issues.

The pan-European STOXX 600 rose 0.2%, with miners , utilities and know-how shares main morning good points.

Expertise shares have been additionally behind an increase in essential Asian indexes, as they mirrored an in a single day rally of their friends on Wall Avenue.

“European markets are nonetheless taking the lead from offshore markets,” mentioned Thomas Mathews, markets economist at Capital Economics.

“With charges beginning to rise and inflation selecting up, the times of massive, sustained rallies out there are over, however we are able to anticipate to see European equities grinding increased for some time.”

Capping general good points out there, telecom gear maker Ericsson fell 3.3% following its quarterly outcomes, whereas French meals group Danone slipped 0.8% after recording rising prices and slower gross sales development within the third quarter. [nL8N2RF0KD]

As Europe’s third-quarter reporting season kicks into excessive gear, traders are scrutinising firm outcomes for any indicators that supply-chain strains, labour shortages and surging power costs are beginning to undermine earnings.

Third-quarter earnings at European corporations are anticipated to develop 46.7% from the identical interval in 2020, in accordance with Refinitiv I/B/E/S knowledge, with earnings revisions by analysts cooling just lately however nonetheless remaining constructive.

“It is onerous to see how additional optimism about earnings would enhance the market an excessive amount of at this level simply due to how a lot excellent news is already discounted in share costs,” Mathews added.

The STOXX 600 has gained 2.8% up to now in October after a 3.4% drop within the earlier month, as traders turned to riskier belongings in expectation of a gentle earnings season.

Nevertheless, including to latest market volatility, traders have been aggressively pricing in rate of interest hikes, significantly within the UK, to offset a surge in power costs and different bottlenecks driving basic costs increased.

UK’s FTSE 100 rose about 0.1%, boosted by miners as copper costs rose, buoyed by decades-low provides and an excessive scarcity of available metallic in change warehouses.

Swedish telecoms operator Tele2 slipped 3.4% after posting quarterly core earnings in keeping with market expectations.

Telecoms and healthcare sectors fell 0.5% and 0.2%, respectively, weighing on the markets.

Reporting by Anisha Sircar and Sruthi Shankar in Bengaluru; Enhancing by Anil D’Silva

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