Earnings Report Advance European Stocks
European stocks kept pace after a batch of quarter earners released earnings reports. The advance is supported by the “historic” €750 billion stimulus package for economic aid approved last month.
This offers some positive mood to the grim investors who weathered the lukewarm performance of the Euro stock market in the past weeks.
Stoxx 600 was up 0.8% led by oil company BP, experiencing an extended two-day rise. STOXXE, euro zone’s stocks, experienced an impressive gain of 1.0%. France’s CAC is up by 0.28%, while Footsie barely made a move. On the other hand, Germany’s DAX declined by 0.36%.
Among the biggest gainers is Ahold Delhaize NV. The company which owns supermarket chains in the US and Europe, reported record-high sales for 2020. Similarly, Bank of Ireland surged 10.5%, with signs of recovery within sight.
Travel and leisure stocks waken up from their long sleep, climbing at 1.6%. International Consolidated Airlines Group recorded the most significant pull at 7.2%. However, food and beverage fell 0.5%, but Coca-cola rose 4.33%.
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Big income losers will also release their reports. Many companies in STOXX 600’s list are forecasted to report loss amounting to 58.3%. In France, hotel operator Accor reports a €1.51 billion damage in the first half.
BMW’s 3% slide is the German car manufacturer’s first loss of the decade. The company reported a two-quarter net loss of €212 million from a net income of €1.48 billion euros in the same period last year.
Earnings before interest and taxes sank to €666 million or $787.6 million from last year’s profit amounting to €2.20 billion from a total revenue of €14.88 billion. This translates to a 34.2% fall.
Revenues in the automotive segment dropped 34.2% while the motorcycle segment slid by 28.2%. Deliveries of luxury cars fell 25% during the lockdown.
However, the luxury car producer slowly regains its pre-pandemic momentum. Since mid-June, all BMW’s manufacturing plants are working on a full scale, business as usual.
The group plans to invest heavily in R&D, amounting to €30 billion to aid its future business prospects. The company will focus on product innovation, particularly sustainability and digitization. It targets the reduction of CO2 emissions by 2030.
European manufacturing activities reported to pick up in moderate expansion, although the activities are still lower than expected. The wave of manufacturing activities suggests a more robust economic recovery across the globe.
Earnings season help relieve satiation from frequent lousy news in the COVID-era stock market.
Stock trading may be up on Wednesday, but weaker-than-projected economic performance outweighed the gains overall.
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