European stocks rose on a relatively quiet Thursday with no U.S. trading and little economic data released.
The pan-European Stoxx 600 index closed up 0.56% at 517.54, its highest level since June 24th.
Political uncertainty continues to weigh on investors’ minds in France ahead of a crucial second round of voting this weekend, while the UK parliamentary elections appeared to be settled on Thursday with London’s FTSE 100 rising 0.8%.
“With opinion polls pointing to a Labour landslide victory throughout the six-week campaign, investors have long been pricing in the impact of a Labour victory at the 2024 general election,” said Dan Coatsworth, investment analyst at AJ Bell. “With Labour’s manifesto promising no tax increases and what feels like a charm offensive for the City, markets are taking a cool head at the prospect of a Labour government.”
In economic news, German factory orders fell a shocking 1.6% in May, compared with an expected increase of 0.5%, following a 0.2% decrease in the previous month.
The HCOB euro zone construction PMI fell to 41.8 in June from 42.9 in May, suggesting the sector’s contraction accelerated last month, marking the second-largest rate of decline in output since mid-2020.
Finally, the CIPS/S&P Global UK Construction PMI fell to 52.2 in June from a two-year high of 54.7 in May. This was the fourth consecutive month above 50 but well below the 53.6 that economists had expected.
Market movers
Smith & Nephew shares rose 7% after Swedish activist investor Cevian Capital bought a 5% stake in the medical device maker. The 5.021% stake is Cevian’s first investment in a FTSE 100 company and makes the Swedish firm its third-largest shareholder.
German auto parts maker Continental’s shares jumped 10 percent after the company told analysts in a pre-market conference call that it expects strong growth in China this year. Citi also upgraded the company to a buy rating.
Reinsurance stocks including Hiscox, Beasley and Swiss Re have been out of favour over the past week but bounced back slightly after RBC downplayed the long-term impact of Hurricane Beryl on the stock price. The brokerage said reinsurers tend to underperform the market in July when hurricane season starts, but outperform from September to November.
