Europe: Shares close near nine-week high, powered by utility, telecom stocks
[BENGALURU] European stocks closed at near nine-week highs on Tuesday (May 20) with utilities and telecom firms leading gains, while some positive corporate earnings also bolstered sentiment.
The pan-European Stoxx 600 index ended 0.7 per cent higher after notching an eight-week high. Most regional bourses also ended up, with ones in Germany and Ireland touching a record high, while Spain's was trading at its highest since 2008.
Utilities rose 1.8 per cent, leading broader gains, with Portugal's EDP Renovaveis climbing 4.1 per cent after Deutsche Bank upgraded the stock to 'buy' from 'hold'.
Shares of offshore wind power developers Oersted jumped 14.5 per cent and Vestas Wind gained 4.8 per cent after US President Donald Trump's administration lifted a month-old stop-work order on a major offshore wind facility planned off the coast of New York.
Vodafone's 7.3 per cent gain after the telecom giant said it sees cash-flow growth this year boosted the sector by 1.7 per cent.
Broader markets also stabilised after a surprise downgrade by Moody's on US sovereign credit late on Friday sapped risk appetite. However, Wall Street had recouped early declines to close flat on Monday.
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'The downgrade did shake confidence a little bit yesterday, but it seems like we quickly got over that... So (today) it kind of seems just a little bit of a rebalancing in appetite,' said Daniela Hathorn, senior market analyst at Capital.com.
Meanwhile, China cut benchmark lending rates for the first time since October on Tuesday, to help buffer the economy against the impact of the Sino-US trade war.
Luxury stocks, which are exposed to Chinese consumers, gained on Tuesday with LVMH up 1.3 per cent, Burberry gaining 3.7 per cent and Kering up 4 per cent. The wider index was up 0.3 per cent.
The European Union and Britain announced new sanctions against Russia without waiting for the United States to join them, casting a cloud over future developments in peace talks between Russia and Ukraine.
Investors are also awaiting any trade deals, with Trump's reciprocal tariffs set to kick in again in early July.
On the earnings front, SalMar dropped 7.8 per cent to the bottom of the Stoxx 600 after the Norwegian salmon farmer reported lower-than-expected first-quarter operating profit.
London-based fast food chain Greggs gained 9.2 per cent after quarterly results while distributor Diploma hit a record high after raising its full-year organic revenue growth forecast.
Swiss bank UBS dropped 3.3 per cent, with traders citing a media report that the lender was set to lose the first leg of a battle over government proposals to make it hold more capital.
Heineken dipped 3 per cent after Bloomberg News reported Mexico's Femsa had sold its remaining stake in the brewer. REUTERS
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