European stocks advanced on Monday as optimism around earnings and economic reopening helped investors shrug off signs of slowing growth in China.
Risk appetite was also boosted after the U.S. Senate on Sunday finalized the text of its $1 trillion bipartisan infrastructure bill. The legislation will next be introduced to the Senate.
Closer home, the euro area manufacturing sector growth moderated in July but the pace of expansion remained elevated, final data from IHS Markit showed.
The final factory Purchasing Managers’ Index fell to 62.8 from 63.4 in June. This was the lowest reading since March.
But the reading was above the flash 62.6 and the sector has recorded successive months of expansion since July 2020.
Germany’s retail sales growth exceeded expectations in June as the relaxation of restrictions related to the pandemic supported consumer demand, data from Destatis revealed earlier today.
Retail sales grew 4.2 percent month-on-month in June, much faster than the economists’ forecast of 2 percent. Nonetheless, the latest increase was slower than the 4.6 percent growth logged in May.
Elsewhere, Britain’s factories reported a further slowing of growth in July due to shortages and supply chain problems caused by the COVID-19 pandemic, in line with expectations.
The Bank of England looks set to raise its forecasts for inflation on Thursday, at the end of its August meeting.
The pan European Stoxx 600 rose 0.6 percent to 464.64 after declining half a percent on Friday. The German DAX edged up 0.3 percent, France’s CAC 40 index climbed 0.9 percent and the U.K.’s FTSE 100 rallied 1.1 percent.
Aerospace company Meggitt soared as much as 57 percent in London after it agreed to a takeover offer from Parker-Hannifin Corp.
Jet and auto parts supplier Senior Plc surged 6.2 percent after raising full-year expectations.
HSBC Holdings shares gained 1 percent after the Asia-focused lender reported that its first-half profit more than doubled.
NatWest Group rallied 2.4 percent after unveiling plans to distribute capital to shareholders.
Axa climbed 3.7 percent in Paris as it reported higher revenues across its global insurance and reinsurance business, driven by improving pricing and market conditions.
Allianz slumped 8.3 percent. The German insurer said earnings could be materially hurt by a U.S. Justice Department investigation into its Structured Alpha Funds that have been linked to investor losses during the coronavirus-related market downturn early last year.
Vonovia gained 1.6 percent. The company nudged up its offer for rival real estate company Deutsche Wohnen SE to about 19.1 billion euros ($22.7 billion).
Automakers led a broad advance, with BMW, Daimler, Volkswagen and Renault rising 2-3 percent.
Heineken, the world’s second-largest brewer, rose about 1 percent after reporting strong earnings for the first half of the year.
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