By Peter Nurse
Investing.com - European stock markets traded higher Monday, helped by strong results from banking giant HSBC and French insurer AXA as well as healthy German retail sales.
At 4:05 AM ET (0805 GMT), the DAX in Germany traded 0.5% higher, the CAC 40 in France rose 0.9% and the U.K.’s FTSE 100 climbed 1%.
This quarterly earnings season has generally been positive so far in Europe, and HSBC Holdings (LON:HSBA), Europe’s largest bank by assets, continued the theme Monday. The banking giant posted pretax profit for the first half of the year of $10.8 billion, more than double the performance for the same period last year. It also reinstated its dividend payments and released $700 million that had been set aside to cover potential bad loans. Its stock rose 1.2%.
Heineken (OTC:HEINY) stock slipped 0.1% after the world's second-largest brewer beat first-half earnings expectations, but warned of weakness in the rest of the year as costs cut into margins. The Dutch AEX index nonetheless hit a new all-time high, thanks to further strength in chipmaking names ASML and BE Semiconductor, and a rebound in Prosus (OTC:PROSF) stock.
AXA (PA:AXAF) stock rose 3% after Europe’s second-largest insurer reported an 180% increase in net income in the first half, rebounding from last year's Covid-19 hit.
There was not such good news from Allianz (DE:ALVG), its stock falling 5.4% after the German insurer and asset manager warned of a potential hit as the U.S. Department of Justice began an investigation into its Structured Alpha Funds.
Elsewhere, aero-engineer Meggitt (LON:MGGT) stock soared 58% after U.S. firm Parker-Hannifin (NYSE:PH) said it would buy the U.K. rival in a deal that values it at 6.3 billion pounds ($8.76 billion).
In economic news, German retail sales rose 4.2% in June, much more than expected following an easing of Covid-19 restrictions, and followed an upwardly revised increase of 4.6% in May.
German manufacturing PMI data also came in better than expected, rising to 65.9 in July, from 65.1, which bodes well for Europe as a whole as the German economy tends to be the region’s main driver.
Asia markets traded higher Monday, creating a positive handover for Europe, as Chinese equity markets stabilized after last week’s heavy selloff on the back of the crackdown by local regulators on the tech and education sectors. The tone was helped by a call from Chinese regulators for dialogue with their U.S. counterparts over Chinese companies' listings in the U.S.
Elsewhere, oil prices weakened Monday in response to the Chinese factory data slowing sharply in July, suggesting weakening economic growth in the largest crude importer in the world.
At 4:05 AM ET, U.S. crude futures traded 1.2% lower at $73.03 a barrel, while the Brent contract fell 1.2% to $74.53.
Additionally, gold futures fell 0.3% to $1,811.25/oz, while EUR/USD traded largely flat at 1.1867.