UPDATE 2-Recovery optimism lifts European stocks, tech rallies as Nasdaq hits record high

  • 6/24/2021
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* Retail, financial services, bank stocks lead gains * German shares gain as business climate index rises * BoE keeps rates unchanged, leaves stimulus taps open * Tecan hits record high after Paramit acquisition (Adds comments, graphic; updates prices throughout) June 24 (Reuters) - European shares rose on Thursday as investors focused on a steady economic rebound against the backdrop of fears of a tapering in global monetary stimulus, while technology stocks jumped, taking cues from their U.S. peers. The pan-European STOXX 600 was up 0.9%, with technology, retail and travel and leisure stocks among the biggest gainers. Technology stocks jumped 1.7%, tracking gains in the tech-heavy U.S. Nasdaq index. The benchmark STOXX 600 has seen sharp swings this week, with losses on Wednesday almost erasing gains from the previous two days as mixed messages from the U.S. Federal Reserve left investors uncertain about central banks’ approach to tapering their massive stimulus in the face of rising inflation. However, with the European Central Bank reaffirming its accommodative stance on monetary policy earlier this month, analysts said they did not expect European equities to continue to slide. “With the ECB staying adamant that it’s not time to consider withdrawing monetary policy support yet, we don’t expect (Wednesday’s declines) to lead to a trend reversal,” said Charalambos Pissouros, senior market analyst at JFD Group. German shares gained 0.9% as data showed the business climate index rose by more than expected in June and hit its highest level since November 2018. “The strong Ifo reading sets the bar for future growth even higher,” said Carsten Brzeski, global head of macro at ING. “Right now, the sky is the limit for confidence indicators in Germany and indeed, the entire eurozone.” The Bank of England kept policy rates unchanged and said inflation would surpass 3% as Britain’s locked-down economy reopens, but the climb further above its 2% target would only be “temporary” and most policymakers favoured keeping stimulus at full throttle. London’s FTSE 100 rose 0.6%, while the mid-caps index fell 0.5%. “Unlike the Fed, the Bank of England remains confident that the recent rise in inflation will be fleeting in nature,” said Joshua Mahony, senior market analyst at IG. “That dovish stance has helped to drive the market higher, following a week dominated by uncertainty.” In company news, Swiss laboratory instruments maker Tecan Group jumped 10.8% to a record high after it said it would buy U.S. medical devices and life sciences instruments group Paramit Corp for $1 billion. French retailer Carrefour SA rose 0.7% after it said late on Wednesday it had started considering possible consolidation, divestitures or tie-ups of its foreign subsidiaries. Airbus shares gained 0.6% even as regulators called for more rigorous checks when pulling some its jets out of pandemic storage following flawed cockpit readings that could suggest blocked sensors. Reporting by Sagarika Jaisinghani and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Chris Reese Our Standards: The Thomson Reuters Trust Principles.

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