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Europe Markets: European stocks rebound with Universal Music Group soaring in its debut

Stocks rebounded in Europe on Tuesday, following the biggest one-day drop since mid-July, with Universal Music Group soaring in its debut and pharmaceuticals, energy and apparel and footwear among big contributing sectors.

The Stoxx Europe 600 index
SXXP,
+0.89%

rose 1% to 458.99, bucking two days of losses and a 1.7% tumble on Monday, when global markets reeled from worries about contagion from troubled property group China Evergrande
3333,
-0.44%
.
The German DAX
DAX,
+1.21%

and French CAC 40
PX1,
+1.26%

rose 1.4% each and the FTSE 100 index
UKX,
+0.97%

added 1%.

Those gains came as Wall Street stocks
DJIA,
+0.06%

SPX,
+0.13%

COMP,
+0.40%

bounced back from deep losses the previous day, with investors pushing back on the idea that if Evergrande defaults on its loans, a Lehman-like moment could emerge for global stocks.

Attention was turning to the two-day Federal Open Market Committee meeting that begins on Tuesday.

“It is possible we could see renewed weakness for stocks if Chairman Jerome Powell suggests QE will be tapered quicker than expected amid surging inflationary pressures around the world,” said Fawad Razaqzada, market analyst with ThinkMarkets, in a note to clients.

A positive distraction for investors came as Universal Music Group
UMG,
+38.05%
,
the music label spun out of Vivendi 
VIV,
-21.76%
,
surged 38% on its first day of trading in Amsterdam. Without that Universal stake, shares of Videndi dropped 20% to €10.42, making for the Stoxx 600’s biggest decliner. A day earlier, Vivendi shares lost 0.6% to €10.30.

Some airlines continued to rise a day after the administration of President Joe Biden announced it would lift a travel ban on vaccinated visitors later this fall, following restrictions put in place in March 2020 that applied to China, Europe, Brazil, South American and India.

Shares of British Airways owner International Consolidated Airlines Group
IAG,
+3.44%

climbed 3.8%. Deutsche Lufthansa
LHA,
-0.91%

said that bookings between the U.S. and Europe have jumped 40% from the previous week, following the announcement of easing restrictions. After a 5% surge on Monday, shares of Lufthansa were off 0.8%.

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