European shares ease from peak; banks, miners boost UK stocks

  • 7/13/2021
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(Reuters) - European stocks eased from all-time highs on Tuesday ahead of a key U.S. inflation reading, but British banks kept UK’s FTSE 100 afloat after a central bank move to scrap curbs on dividends. The pan-European STOXX 600 index slipped 0.1% after hitting a record high in early trading. Barclays, HSBC, and Lloyds Banking Group rose between 1.1% and 1.8% after the Bank of England scrapped pandemic-era restrictions on dividends from top lenders. UK’s FTSE 100 rose 0.3%, while other main regional indexes fell. Investors are awaiting U.S. consumer price data for June — set to be released later in the day — to see if the recent rise in prices is persistent and strong enough to spur a faster-than-expected policy tightening by the Federal Reserve. “We are less interested in when the peak is and much more interested in how enduring price pressures are likely to be,” RBC Capital Markets analysts wrote in a note. “We have no doubt that this ‘peak’ narrative is likely to be all the talk on Tuesday, but that misses a much bigger point: sticky prices are likely to linger for quite some time.” European Central Bank President Christine Lagarde said on Tuesday it has pledged to be “persistent” and will not repeat its past mistake of tightening policy too early. Among individual stocks, Finnish telecom equipment maker Nokia jumped 6.6% after it said it planned to raise its full-year outlook. Swiss watchmaker Swatch Group rose 2.0% as it returned to profit in the first six months of 2021 and its sales jumped more than 50%. Rival Richemont climbed 0.4%. Meanwhile, major U.S. banks, including JPMorgan and Goldman Sachs, will report earnings later in the day. European reporting season will kick into high gear later this month, with analysts expecting second-quarter profit for STOXX 600 companies to more than double from a year ago, as per Refinitiv IBES data. Graphic: STOXX 600 YoY Earnings Growth Rates - Norwegian chipmaker Nordic Semiconductor surged 6.2% as its quarterly profit doubled. Miners like Rio Tinto, Anglo American and BHP Group got a boost from rising metal prices after better-than-expected trade data from top consumer China. Healthcare stocks fell 0.7% after a near 1% surge in the previous session. Frankfurt-listed shares of genetic testing company Qiagen NV dropped 3.0% after it lowered its outlook on weaker demand for COVID-19 tests. German drug packager Gerresheimer declined 7.0% after its quarterly earnings report disappointed investors. Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V Our Standards: The Thomson Reuters Trust Principles.

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