GAINS in banking stocks and airlines lifted European shares on Tuesday, though trading remained cautious ahead of key economic data later this week.
The travel and leisure and banking sectors were the top gainers for the day, rising 0.7 per cent and 0.9 per cent respectively. The pan-European Stoxx 600 index edged 0.2 per cent higher to 518.88 points.
Banco Santander rose 2.5 per cent after the Spanish bank launched a 1.525 billion euro (S$2.2 billion) share buyback programme.
Meanwhile, the travel sector was lifted as Ryanair upgraded its summer air fare outlook. Ryanair rose 4.6 per cent, while easyJet and Wizz Air respectively gained 6.9 per cent and 5.2 per cent.
Germany’s benchmark DAX rose 0.4 per cent, despite detailed GDP data released earlier in the day that showed Europe’s biggest economy shrank by 0.1 per cent in the second quarter of 2024.
Further data is awaited throughout the week from the region’s major economies as well as Friday’s European Union inflation print and inflation data from the US.
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Investors are looking for more signals on the economic health of the euro zone, as well as further signals on the policy path for both the European Central Bank and Federal Reserve ahead of rate decisions in September.
“While the US has the potential to go into recession, Europe continues to barely avoid one – and is thus in a more susceptible situation,” said Thierry Wizman, Global FX & Rates Strategist at Macquarie.
“That sense of foreboding will keep the stock market sensitive (to the downside) to periodic negative growth surprises, such as we had in late July.”
ECB policymaker Klaas Knot said the euro zone central bank can gradually lower interest rates if inflation continues to fall, but needs more data before confirming a September cut.
AI-sector darling Nvidia’s second-quarter results on Wednesday are expected to be a key trigger for global equities, as even a slight miss could hurt the chipmaker’s shares.
Europe’s tech sector reversed early losses, closing 0.2 per cent higher.
Among regional bourses, Spanish stocks rose 0.6 per cent to their highest since early June on Banco Santander’s rise.
Among individual movers, Bunzl surged 8 per cent, the biggest gainer on the Stoxx 600 after the British business supplies distributor raised its annual adjusted operating profit forecast.
Spain’s Talgo dropped as much as 10 per cent on Tuesday after the government blocked a 619 million-euro takeover bid for the train maker from Hungarian consortium Ganz-Mavag, citing national security concerns. REUTERS
