Corporate Tax

Shares cling to highs in Europe because of sturdy corporate earnings

Share updates

European stocks hovered near record highs on Tuesday as traders watched corporate earnings closely and waited for some economic data.

The regional Stoxx 600 index and the British FTSE 100 each gained 0.1 percent in early trading. The Stoxx had previously reached an all-time high on the previous Monday.

Corporate earnings, released Tuesday, continued their strong streak, with Paris-based lender Société Générale and London-listed Standard Chartered posting earnings that exceeded analysts’ expectations.

StanChart, which focuses on emerging markets, reported a record pre-tax profit of $ 1.15 billion, up 55 percent from the same period last year. Société Générale posted its best half-year results in five years and exceeded analysts’ net profit expectations by 68 percent.

This year has seen an unusually strong harvest season on both sides of the Atlantic. More than half of the US reporting season, 86 percent of companies beat earnings expectations, while Europe beat 55 percent so far, according to data from FactSet and Morgan Stanley.

“The continued good earnings outlook is an important factor in our assessment that the stock bull market remains on a solid footing,” UBS analysts wrote in a statement, adding that further support came from a still supportive US Federal Reserve.

“The growth rate is flattered by the low levels in the same period last year. But the results are still impressive compared to pre-pandemic revenue, ”they added.

US factory orders data will be released later Tuesday, while the latest US job report is expected on Friday. Economists polled by Bloomberg expect July non-farm employment numbers to build on strong June results. Last week the Federal Reserve said it had made “strides” toward its goal of full employment.

In Asia, markets were shaken after Chinese state media criticized the online video game industry, calling it “spiritual opium”. The shares of Chinese internet giant Tencent fell as much as 10.8 percent before the company announced that it would introduce new restrictions on minors on its gaming platform.

NetEase and XD, two competitors, even lost 15.7 and 21.8 percent, respectively. China’s video game market was worth $ 43.1 billion in 2020, according to Niko Partners, a research and advisory firm.

Hong Kong’s Hang Seng index fell 0.35 percent, while China’s CSI 300 remained unchanged, recovering from its worst month in nearly three years. The Hang Seng Tech Index, which includes Tencent and its competitors, lost 1.5 percent.

The Chinese government’s statements on gambling are the latest in a series of criticisms Beijing has leveled of the tutelage of service and technology companies, terrifying investors as the government seeks more control over key sectors of the economy.

Elsewhere, the global oil benchmark Brent crude rose 0.3 percent to $ 73.09. The pound rose 0.2 percent against the dollar to buy $ 1.3915 and the euro gained 0.1 to $ 1.881.

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