Shares mostly higher despite drag from miners, German issues
Tuesday, June 8th, 2021
European shares were mostly higher on Monday, having erased earlier declines as investors shrugged off weaker-than-expected China trade data and a profits warning from workspace provider IWG.
“The new week has begun in a similar fashion to the last one, with investors awaiting bigger events later in the week that will hopefully spark some more movement,” said IG chief market analyst, Chris Beauchamp.
The pan-European Stoxx 600 index added 0.22% to 453.56 after hitting a record high on Friday. Investors were also eyeing critical US inflation data due out later in the same week.
Germany’s Dax dipped 0.1% to 15,677.15, whereas Milan’s FTSE Mibtel climbed 0.99% to 25,824.71.
Weighing on the Dax was data showing that factory orders in the euro area’s largest economy dipped by 0.2% month-on-month in April (consensus: 0.5%).
Mining stocks were weaker as lower-than-expected Chinese exports sparked concerns of weakening demand. Trade data for May showed that exports slowed more than expected, rising 27.9%, although imports rose to 51.1% from 43.1%.
According to economists at Pantheon Macroeconomics, Chinese exports were set to continue falling over the next few months given that they remained well above their pre-Covid-19 trends.
Elsewhere in the equity space, IWG was at the bottom of the pile on the Stoxx, down 10.26% after warning that underlying profit for 2021 is set to be “well below” the previous year’s level due to Covid-related restrictions in some of its markets, but reiterated its expectations for a recovery in 2022.
French vouchers and cards provider Edenred rose 3.56% after Deutsche Bank upgraded the stock to ‘buy’.
UK housebuilders all rallied on news that British house prices have risen to a new peak, as the stamp duty holiday and demand for larger houses after the pandemic continued to fuel the market.
Halifax bank reported that the average property now costs £261,743, with annual house price inflation at its strongest level in almost seven years based on its own index, which revealed the average price rose by 1.3% in May alone, and was 9.5% higher year on year than a year ago.
Persimmon, Vistry, Taylor Wimpey, Redrow and Bellway all finished higher on the news, along with a note from broker Liberum that saw more upside in the sector.