LONDON/MILAN, May 17 European shares steadied on Tuesday with gains in companies such as Taylor Wimpey and Vodafone following encouraging updates and a rally in mining companies offset by a weaker auto sector.
The pan-European FTSEurofirst 300 ended little changed after earlier rising to its highest since early May. The index, which closed flat also in the previous session, is still down over 8 percent this year.
Taylor Wimpey advanced 4.7 percent after the housebuilder announced a new special payout, promising investors about 1.3 billion pounds over three years, underpinned by strong demand for property in Britain.
Vodafone rose 1.5 percent after the world’s second-largest mobile phone operator said its earnings growth would accelerate this year. The group said a programme to improve its networks had boosted demand in Europe and helped it to return to underlying growth in 2016 revenue and core earnings for the first time since 2008.
“Demand for data continues to grow strongly…and Vodafone have invested heavily in infrastructure to capitalise on this,” Steve Clayton, head of equity research at Hargreaves Lansdown, said.
The STOXX Europe 600 Auto index fell 2.7 percent, making it the top sectoral loser. Fiat Chrysler (FCA) fell 6.7 percent after Exane BNP Paribas downgrades the stock to “underperform”.
“After 7 years of global auto expansion – and unprecedented NAFTA returns – FCA has done too little to insure itself against a downturn in our view. As the end of a lease driven bubble approaches, and M&A optionality fades, FCA looks out of time,” it said in a note.
Greek banks advanced 3.7 percent, with UBS turning more positive on the Greek banking sector arguing that signs of progress in talks with Greece’s lenders meant the sector could rebound.
“The starting point is very challenging and risks abound, but we see a fundamental investment case and valuations suggest upside potential,” UBS analysts said, referring to Greek banks.
The STOXX Europe 600 Basic Resources index rose 1.9 percent, as copper prices were supported by a softer dollar and firm oil, but remained within sight of recent lows brought about by a resurfacing of worries over demand growth in top consumer China.
Today’s European research round-up
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