EUROPEAN shares closed at a record high on Tuesday, with German’s Delivery Hero notching its biggest jump on record on the sale of its Taiwan foodpanda business, while the outlook around interest rates also remained on the cards.
The pan-European Stoxx 600 inched up 0.18 per cent, with the automobiles sector leading sectoral gains with a 1.4 per cent rise.
Delivery Hero soared 26.3 per cent, after Uber announced a US$1.25 billion deal to take over its foodpanda business in Taiwan and buy new shares in the German firm.
Earlier in the session, the main index briefly spiked downwards following a stronger-than-expected US producers inflation report.
After strong gains last week, investors are at bay for two days now as they wait for any hints on when the first rate cut out of the US could come. While the European Central Bank has hinted at staying independent of the US Federal Reserve on rate reductions, the outlook remains uncertain beyond June.
Belgian central bank chief Pierre Wunsch told German newspaper Handelsblatt that while ECB’s first two interest rate cuts are a “no brainer”, slower than expected policy easing in the US could delay some of the European regulator’s moves.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“The really big difference between the US and Europe has been the relative resilience of the US economy and especially household spending,” said Jennifer McKeown, chief global economist at Capital Economices.
“This explains why interest rate cuts are likely to start a little later (in the US), most likely in September.”
Meanwhile, Swiss eye-care group Alcon advanced 7.5 per cent to an all-time high after first-quarter earnings, while hearing aid maker Sonova Holding climbed 6.7 per cent after forecasting accelerating growth for 2024.
Banking stocks rose over 1 per cent, with Societe Generale gaining 3.7 per cent after French President Emmanuel Macron said in a TV interview that the European banking sector needs greater consolidation, even if that means a major French bank being bought by a European rival.
On the other hand, Rheinmetall shed 2.7 per cent after the German arms manufacturer missed expectations for first-quarter sales and profit, and was among the biggest losers on German’s DAX, which was down 0.1 per cent and underperforming among regional peers.
Bottoming the Stoxx, chemicals distributor Brenntag dropped 8.2 per cent after lowering its full-year earnings forecast.
The travel and leisure sector was the worst hit, with Flutter dropping nearly 2 per cent after the world’s largest online betting company maintained its full-year outlook.
Among others, automobile giant Volkswagen advanced 2.6 per cent. A report showed the German automaker is exploring the sale of as much as US$1.08 billion worth of stock in its heavy truck-making arm Traton SE. REUTERS
