European stocks extended their gains on Thursday, with Basic Resources and Autos&Parts following a recent run of better-than-expected data in the United States and fiscal stimulus talks in China.
“To be fair, the global outlook for the indices looks brighter following yesterday’s Fed minutes, if only because everyone seems happy to fix the problem for a while,” said Chris Beauchamp, chief market analyst at IG. on the materials.
“The recent slump in commodity prices could provide some temporary relief from inflation, and perhaps earnings season will surprise on the upside when it kicks off next week.”
Some analysts also attributed the markets’ better tone to a recent flurry of stronger-than-expected economic reports in the United States.
The pan-regional Stoxx 600 index posted a 1.88% gain to 415.01, alongside a 1.97% jump for Germany’s Dax, while Italy’s FTSE Mib posted a 3.05% gain to 21,558.07.
The euro/dollar was little changed 0.27% at 1.0155.
By sector, basic resources led the Stoxx 600, jumping 5.43% to 560.29 while the Autos&Parts sector index rose 5.29% to 501.24.
Incidentally, Bloomberg reported that authorities in Beijing are considering advancing $220 billion in bond sales to the second half of 2022 to fund a fiscal stimulus package.
In stock news, semiconductor companies STMicroelectronics, BE Semiconductors, ASM International and ASML Holding all posted gains after Samsung posted its best April-June profit since 2018, on strong sales of memory chips to server clients.
Shares of Tenaris jumped 8% after Jefferies raised its price target on the stock.
British homebuilders were in the red after Persimmon warned of rising construction costs due to rising wages and raw material prices. However, he still expected annual profits to be “slightly” higher than last year. Rival Barratt was also lower on the news, but Berkeley reversed previous losses.
Gaming shares fell after Entain said online revenue would be flat. Flutter and Evolution Gaming Group have followed suit.