European Stocks Make Gains as Bid Hopes and Broker Upgrades Boost Investor Confidence

Strategic Insights -

European stocks made headway as bid hopes and broker upgrades helped investors emerge from the summer doldrums. The FTSE Eurofirst 300, which had suffered six consecutive weekly losses, began the new week on a positive note, with its mining sub-index keeping the pan-European benchmark afloat. The gains were led by the mining sector, with commodity trader Glencore considering a bid for Kazakh copper producer Eurasian Natural Resources Corporation.

Key Takeaways:

  • The FTSE Eurofirst 300 climbed 0.2% to 1,091.94, marking the end of six consecutive weekly losses.
  • Glencore's potential bid for Eurasian Natural Resources Corporation lifted the mining sector, which kept the pan-European benchmark afloat.
  • Credit Suisse analyst Arndt Ellinghorst upgraded Peugeot to "buy" from "hold", citing its strong fuel efficiency and emerging market growth.
  • Citigroup cut Renault to "hold" from "buy" and lowered its price target to €43 from €60, leading to a 1.6% decline in Renault's shares.
  • Credit Suisse named Germany's BMW as its top pick due to its high exposure to premium customers in emerging markets, leading to a 0.3% gain in BMW's shares.
  • Defensive sectors such as pharmaceuticals and medical devices also gained, with French drugmaker Sano-fi-Aventis climbing 1.3% to €52.08 and German medical device maker Fresenius adding 1% to €71.71.
  • Italian utility Edison climbed 3.6% to €0.84 after securing bank loans to cover financial and operative needs.
  • Fashion house Hermes rose 2.7% to €187.55 on continuing talk that an offer was imminent.

Statistics:

  • The FTSE Eurofirst 300 rose 0.2% to 1,091.94.
  • The mining sub-index kept the pan-European benchmark afloat.
  • Peugeot's shares climbed 1.9% to €27.97 after being upgraded to "buy" from "hold".
  • Renault's shares fell 1.6% to €35.82 after being cut to "hold" from "buy".
  • BMW's shares climbed 0.3% to €62.51.
  • Sano-fi-Aventis' shares climbed 1.3% to €52.08.
  • Fresenius' shares added 1% to €71.71.
  • Edison's shares climbed 3.6% to €0.84.
  • Hermes' shares rose 2.7% to €187.55.

Sources:

  • "Neil Dennis EUROPE Stocks made headway in Europe as bid hopes and broker upgrades helped investors emerge from the summer doldrums."
  • Credit Suisse report: "We remain convinced that fuel efficiency, next to emerging market growth, is the central driver for earnings and share price performance."
  • Citigroup report: "Renault might lead the French peers when it comes to economy vehicles but its combustion engine performance ranks below Peugeot's."
  • "Neil Dennis EUROPE Stocks made headway in Europe as bid hopes and broker upgrades helped investors emerge from the summer doldrums."