Salem Radio Network News Tuesday, August 16, 2022

Business

Prosus, miners lift European shares to two-week high

By Devik Jain

(Reuters) -European shares hit a two-week high on Monday, boosted by miners as an easing of COVID-19 restrictions in China lifted global commodities and assuaged inflation fears, while Prosus shares rallied on the Dutch company’s plans to trim its Tencent stake.

The continent-wide STOXX 600 index gained 1.1%, mirroring a sharp rebound on Wall Street late last week as investors lowered their concerns over persistently high inflation. [.N]

All the major European sectors advanced, with mining stocks jumping 2.8%. Shares of luxury retailers LVMH and Richemont, which rely on China for a major part of their revenue, rose 1.8% and 2.4%, respectively.

“The thing is good news from China are good news for everyone because it could relieve the pressure on supply chains and help easing the inflation problems,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“What we are seeing right now could actually be another dead cat bounce or short-covering as investors are actually preparing for the earnings season.”

Trading has remained volatile in recent days as investors try to assess the impact from rising interest rates globally and soaring price pressures on corporate earnings and economic growth.

All eyes are now on a slew of economic data including German consumer price index, euro zone consumer confidence and final manufacturing activity expected later this week.

Meanwhile, comments from major central bankers including ECB President Christine Lagarde and U.S. Federal Reserve Chair Jerome Powell at the European Central Bank’s annual forum will also be parsed for views on policy outlook after hopes of dovish pivot last week sparked an equity markets rally last week.

Boosting the tech sector, Prosus NV jumped 13.5% after the technology investor said it will gradually sell down its 28.9% stake in Chinese software giant Tencent worth more than $100 billion at current prices.

Among other stocks, Intesa Sanpaolo gained 2.8% after Italy’s biggest bank halved its share buyback programme for this year to 1.7 billion euros ($1.79 billion).

Shares of Faurecia jumped 5.3% after Jefferies upgraded the French car parts maker’s stock rating to “buy” from “hold”.

Ipsen SA fell 4% to hit the bottom of STOXX 600 index after the Paris-based biopharma firm agreed to acquire U.S. cancer drug developer Epizyme Inc

(Reporting by Devik Jain in Bengaluru; Editing by Sherry Jacob-Phillips)

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