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H&M leads retail sector higher as European stocks edge up

Pedestrians, some wearing a face mask or covering due to the COVID-19 pandemic, walk past a “Sale” sign in the window of a H&M store in London, England, on August 12, 2020.


tolga akmen/Agence France-Presse/Getty Images

European stocks edged higher in early trading Tuesday amid signs of an economic recovery across the globe, with the retail sector rallying on better-than-expected results.

The Stoxx Europe 600
SXXP,
+0.70%

rose 0.6%. The U.K. FTSE 100
UKX,
+0.95%

led the major national indexes with a 0.8% gain, while the pound
GBPUSD,
+0.38%

remained under pressure as the U.K. government pushes through a law backtracking on last year’s European Union withdrawal agreement that it admits would violate international law.

U.K. exporters, which dominate the FTSE 100, benefit when the pound falls.

U.S. stocks ended higher on Monday, boosted by a wave of merger-and-acquisition activity and positive vaccine trial news. The Dow Jones Industrial Average
DJIA,
+1.18%

rose 327 points, and the Nasdaq Composite
COMP,
+1.87%

snapped a two-session losing run.

U.S. stock futures
ES00,
+0.64%

were higher, pointing to an upbeat start on Wall Street ahead of the latest product announcement from technology giant Apple, as the Federal Reserve begins its two-day meeting.

In the world’s second-largest economy, China reported its first rise in retail sales since the pandemic. In the U.K., the unemployment rate edged higher in what one economist said was a labor market in a holding pattern while the country’s job-retention program runs through October.

H&M
HM.B,
+13.66%

jumped 13% as the Swedish fashion retailer said its Aug. 31-ending quarter was stronger than expected, helped by well-received collections, more full-price sales and cost control. Rival Inditex
ITX,
+5.06%

added 3%.

Ocado
OCDO,
+5.30%

rose 5% after reporting a 52% revenue boost in the Aug. 31 ending quarter from its joint venture Ocado Retail, helped by a switch in venture partners from Waitrose to Marks & Spencer
MKS,
+3.96%
,
which jumped 4%.

Faurecia
EO,
-6.37%

shares slumped after Peugeot
UG,
+0.71%

said it would delay the distribution of its shares in the automobile supplier to Fiat Chrysler
FCA,
+7.24%

FCAU,
+1.53%

until after the merger has completed. The two auto makers are amending their merger agreement, and Fiat Chrysler shareholders will receive a smaller dividend, as they increased their estimates of synergies.

“Apart from the terms revision, we remain positive [on Fiat Chrysler] as we believe that the merger represents one of the few aggregation stories with a strong industrial value at European level,” said Martino De Ambroggi, an analyst at Equita.

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