European Stocks Extend Rally After French Election, Earningsby
European stocks rose for a fifth day, their longest streak of gains since February, after a political centrist won the first round of French presidential election and companies including Volvo AB reported earnings that beat estimates.
The Stoxx Europe 600 Index rose 0.2 percent at the close in London. Technology stocks were among the biggest gainers, led by Austrian chipmaker AMS AG, which surged 20 percent after flagging an increase in orders over the rest of the year. The Euro Stoxx 50 Index increased 0.2 percent following a 4 percent advance on Monday.
- European stock bears who cite politics as a reason to hold back on investing in the region were punished anew after Emmanuel Macron and second-place finisher Marine Le Pen qualified for the final round of the presidential vote in France. Investors are now shifting their attention to economic fundamentals and corporate results, which they say bode well for the region’s stock market.
- Real estate shares rose the most among industry groups. If Macron wins the French presidency as polls predict, his pro-growth and pro-construction policies, with a focus on lower taxes, could prove beneficial for French and France-exposed REITs, UBS analysts including Charles Boissier wrote in a note.
- “We expect fund flows to be the dominant driver of European stock/sector performance hereon,” Barclays strategists including Dennis Jose wrote in a note. “A reduction in political risk, coupled with an end to the seven-year stagnation in earnings, should lead to an acceleration in foreign investor buying of European equities.”
- Among other shares moving on corporate news, Volvo AB rose as much as 7.6 percent after first-quarter earnings surged 58 percent. Christian Dior SE rose 11 percent after billionaire Bernard Arnault and his family offered to buy the 26 percent of the firm they don’t already own for about 12.1 billion euros ($13.2 billion).