Sun, Aug 06, 2017 - Page 14 News List

Falling euro boosts European exporters

Reuters, LONDON and MILAN, Italy

European shares ended the week on a strong note as a drop in the euro helped shares in exporters, while investors also focused on a raft of company results with insurance firm Swiss Re hit after missing profit estimates.

The regional STOXX 600 ended with a gain of 1 percent, rallying into the close with all sectors in positive territory as the euro — a source of pain for the index over the past months — eased and the US dollar gained following a strong US jobs report.

The index closed at 382.53, up 1.1 percent from last week’s 378.34.

Eurozone blue chips rose 1.2 percent for the day.

A robust US non-farm payroll reading could support the case for the US Federal Reserve to tighten monetary policy further.

While both Germany’s DAX and Britain’s FTSE 100 also gained, the STOXX also posted its first weekly gain after two weeks of losses.

“The decline in the pound and the euro accelerated the move higher in the FTSE 100, DAX and CAC 40,” David Madden, market analyst at CMC Markets UK, said.

While gains among financials and overseas-earning consumer staples firms were the biggest boost to the STOXX, Petrofac Ltd was the top individual gainer, jumping 8.8 percent after its joint venture won a US$2 billion refinery contract.

GEA Group AG shot 8.7 percent higher on news that Albert Frere, Belgium’s richest man, holds a stake of just more than 3 percent in the company.

Elsewhere the attention centered firmly on earnings.

Nearly two-thirds of the companies listed on the MSCI Europe index have already released results. Of them, 61 percent have either beaten or matched expectations with second-quarter earnings growth expected at more than 22 percent, according to Thomson Reuters data.

Swiss Re was the biggest single drag on the STOXX, down about 3 percent after the world’s second-largest reinsurer reported a bigger than expected 35 percent drop in first-half net profit as claims from natural disasters weighed.

Baader Helvea AG analyst Daniel Bischof said the results were weak with all its units apart from life and health clearly missing estimates, and property and casualty showing a worrying dynamic.

“There are still no signs of a broader-based stabilization,” Bischof said, but added that after its underperformance relative to the sector, the stock look increasingly appealing.

The analyst has a “hold” rating on the stock.

Andritz AG also dropped more than 6 percent after revenues at the Austrian engineering group fell more than expected in the second-quarter, prompting the company to lower its outlook for this year.

British homebuilders fell sharply.

Traders cited media speculation that the government could review the “help to buy” scheme to support home ownership among first-time buyers.

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