LONDON: European stocks pushed higher on Thursday as commodities-related sectors rallied and shares in Ocado rocketed after the company signed a partnership deal, while Italian equities recovered some lost ground.
The pan-European STOXX 600 was up 0.1 percent by 0904 GMT, holding at 3-1/2 month highs as shares in energy stocks and miners rose on the back of firmer commodities prices.
While Italy's benchmark was in positive territory following a drop in the previous session, it gave up some early gains to trade 0.6 percent higher, with banks weighing.
On Wednesday, Italian stocks had tumbled more than 2 percent after a leaked draft coalition programme indicated that the parties planned to ask the European Central Bank to forgive 250 billion euros ($296 billion) of Italian debt.
"We've got to keep a very close eye on the 5-Star Movement ... and if they're going to try to put their foot down in any way," said Jasper Reimers, market analyst at Vertex Capital Group.
Even though Italian banks have gained nearly 10 percent so far this year, Reimers was wary of the sector.
"Not just Italian (banks), there are Portuguese and Spanish as well, the stuff we are very, very bearish on - it's not something that we would want to be putting long-term money into," Reimers added.
Britain's FTSE 100 was flat in percentage terms, largely shrugging off a rise in sterling following a report late on Wednesday that Britain will tell Brussels it is prepared to stay in the European Union's customs union beyond 2021. Prime Minister May insisted that Britain was leaving the EU customs union, however.
While indexes were relatively subdued, there were some big movers among individual stocks. Shares in online supermarket Ocado surged 44 percent to an all-time high after the company signed a deal with US retailer Kroger Co to use Ocado's technology for grocery deliveries in the world's biggest market.
"The short sellers were hoping Ocado wouldn't deliver on its international expansion plans. That position now looks like a badly busted flush," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
"It's probably no coincidence that a number of deals have been flushed out since Amazon announced a takeover of Whole Foods last summer," Khalaf added.
Earnings updates also spurred sizeable moves. Altice jumped nearly 12 percent after its French unit showed the first signs of recovery in the first quarter, while French waste and water group Suez rose 2.5 percent after higher waste volumes boosted its first-quarter core earnings.
Shares in Maersk, broadcaster RTL and Royal Mail all fell between 5.6 and 8.1 percent after giving updates.
Overall, European earnings have seen decent growth in the first quarter, though not on a par with the United States. Over 80 percent of MSCI EMU firms have now given updates, and Q1 earnings growth is clocking in at 13.7 percent year-on-year in dollar terms, according to Thomson Reuters I/B/E/S.
Shares in British bookmakers also came under pressure after the UK government cut the top stake on fixed-odds betting terminals from 100 pounds to two. William Hill recovered some losses to trade 2.2 percent lower, while both GVC and Paddy Power Betfair turned positive.
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