European shares eye best week since March, automobiles outperform
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 26, 2023. REUTERS/Staff/File Photo Acquire Licensing Rights
Nov 3 (Reuters) - Europe's benchmark STOXX 600 rose on Friday and was set for its best week since March, led by automobile stocks, as signs of an end to monetary policy tightening by major central banks boosted sentiment.
The pan-European index (.STOXX) climbed 0.2% by 0930 GMT, also supported by upbeat earnings, signs of slowing inflation and falling euro area sovereign bond yields on increased bets of rate cuts in 2024.
Decisions by the Federal Reserve, the Bank of England, the European Central Bank and others to hold rates have underpinned investor hopes that monetary tightening has peaked.
"There's a cautious optimism that it's the end of rate hikes, but that narrative is premature because we need to see how the data is coming up," said Giles Coghlan, chief market analyst at GCFX Ltd.
It all depends on the inflation trajectory, Coghlan added.
Meanwhile, ECB board member Isabel Schnabel noted the central bank is on track to push inflation back down to 2% by 2025 but the "last mile" of disinflation may be the toughest, so the bank cannot yet close the door on further rate hikes.
Real estate (.SX86P) and automobile (.SXAP) were the top sector performers for the week, while energy (.SEXP) was at the bottom of the list.
For the day, automobile stocks led sectoral gains, up 1.7%. BMW (BMWG.DE) advanced 3.1% on higher margins in its automotive segment in the third quarter, and Volvo Car (VOLCARb.ST) jumped 3.3% following its October sales update.
Nexi (NEXII.MI) rose 4.2% on a report saying U.S. private equity Silverlake is considering buying the Italian digital payment firm.
Andritz (ANDR.VI) gained 5.3%, after J.P.Morgan upgraded the Austrian industrial equipment maker to "overweight" from "neutral", citing strong backlog that gives visibility on next year.
Kering (PRTP.PA) rose 2% after Deutsche Bank upgraded the French luxury group to "buy" from "hold", saying its top brand Gucci was "significantly underappreciated" in the brokerage's view.
Other luxury giants LVMH (LVMH.PA) and Richemont (CFR.S) also gained, with the sector (.STXLUXP) touching a more than three-week high.
A.P. Moller-Maersk (MAERSKb.CO) slumped 11.6% to the bottom of the STOXX 600 after the shipping group specified its 2023 outlook and announced a review of its buyback program.
Insurance stocks (.SXIP) were the worst hit, down 1.2%, dragged by a 3.8% decline in France's AXA (AXAF.PA) following its nine-month results.
Reporting by Ankika Biswas in Bengaluru; Editing by Varun H K and Devika Syamnath
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