(Bloomberg) -- European equities rose, snapping a week of losses, as technology stocks rebounded and investors assessed Joe Biden’s decision to step down from the US presidential race.
The Stoxx 600 Index ended the session with a 0.9% gain after the benchmark dropped 2.7% last week. Technology stocks and banks outperformed, while the travel and leisure sector lagged. ASML Holding NV, which slumped last week on concerns about more severe US restrictions on its business in China, contributed the most to gains in terms of points.
Among single stocks on Monday, Ryanair Holdings Plc dropped 17% after cutting its outlook for ticket prices in the crucial summer travel period, saying fares will be “materially lower” in its second quarter as consumers grow more cautious. Shares in other airlines also fell.
Meanwhile, Rentokil Initial Plc jumped 7.8% after the Sunday Times reported that Philip Jansen, the former chief executive officer of BT Group Plc, is in talks with private equity firms about acquiring the pest control firm.
European stocks have been muted recently after falling from a May peak, with focus on the earnings season and the path of interest rates. The European Central Bank gave away little in terms of its plans after leaving rates unchanged last week. Politics has also been on investors’ radars, with turmoil in France and a dramatic few weeks in the US culminating with Biden ending his reelection campaign and endorsing Vice President Kamala Harris.
“Lower chances of a Trump win might well be seen as a relief for Eurozone corporates who might otherwise have been staring down the barrel of his tariff gun,” said James Athey, a portfolio manager at Marlborough.
Morgan Stanley says Europe’s second-quarter earnings season had a positive start. Strategists note 29% of companies reporting so far have beaten earnings per-share expectations despite a slight rise in profit warnings.
Meanwhile, ECB Governing Council member Gabriel Makhlouf said at the weekend that rapid interest-rate action from the central bank isn’t required.
“There’s no need to actually rush to make decisions,” he told the Irish Examiner.
For more on equity markets:
- Another Layer of Uncertainty Adds to Wall of Worry: Taking Stock
- M&A Watch Europe: Unilever Ice Cream Unit; Porsche, Varta
- US Stock Futures Rise
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--With assistance from Kit Rees.
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