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European stocks rally for fifth day as defensives, miners climb

by wrich

By Sruthi Shankar

(Reuters) -European shares extended gains for a fifth straight session on Tuesday, buoyed by defensive sectors and miners, although concerns over a potential recession limited further upside.

The continent-wide STOXX 600 index rose 0.4%, hitting a fresh 10-week high after recouping much of its June losses this week.

Miners jumped 1.6% to lead morning gains, lifted by 4.3% surge in London-listed global miner BHP Group after stellar results.

Telecoms and utilities – sectors seen as safer bets during economic uncertainty – also advanced.

“A lot of this (rally) is running on technicals and momentum, but the fundamentals haven’t changed,” said Seema Shah, chief strategist at Principal Global Investors.

“The economic outlook for Europe is very negative. As we start to see recession come through and some of the hard economic data begins to deteriorate, that’s when you could see European equities deteriorate.”

A survey on German economic sentiment during early August is due at 0900 GMT.

European stocks have held near recent peaks this week, despite weak data out of China and the United States as well as concerns around gas supply disruptions in Germany.

Russia’s Gazprom has cut gas flows to Germany through the Nord Stream 1 pipeline to 20% of capacity, driving fears of a severe shortage in the winter season.

Among other stocks, Delivery Hero climbed 9.9% after the German online takeaway food company forecast a 7% growth on the quarter in its third-quarter gross merchandise value (GMV).

Sonova plunged 14% after the hearing aid maker lowered its full-year earnings forecast, citing a slower-than-expected development in some important markets and higher component and freight costs.

Pandora fell 6.4% after the Danish jewellery maker reported second-quarter sales in line with expectations.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips and Sriraj Kalluvila)

 

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