European stocks extend gains for sixth straight day

By Anisha Sircar

(Reuters) – European stocks inched up for a sixth consecutive session to trade near record highs on Wednesday, as some positive earnings reports helped overshadow worries that soaring natural gas prices were feeding into inflationary pressures.

The pan-European STOXX 600 rose 0.1% after better-than-expected U.S. retail sales data lifted Wall Street equities on Tuesday. [MKTS/GLOB]

European stocks have been eking out small gains this week to stay near record highs as strong earnings and signs of economic momentum counteract concerns around a fresh COVID-19 surge in Europe and inflation.

“There are still question marks around key issues – the cost of energy and base metals, supply chain issues, China, wage growth, the Federal Reserve decision – and how these will impact European markets,” said Societe Generale’s European equity strategist, Roland Kaloyan.

“But what we can say out of this quarterly season is that companies have been able to manage well so far.”

Profits of companies listed on the STOXX 600 are expected to rise 60.4% in the third quarter to 103.6 billion euros ($117.2 billion) from a year earlier, latest Refinitiv data showed, a dip from last week’s 60.7% estimate.

German medical tech firm Siemens Healthineers gained 5.5% after raising synergy targets from its Varian acquisition earlier this year.

Swiss luxury firm Richemont extended its rally for a fifth day, up 0.9% to an all-time high after a slew of price target raises by brokerages.

Adding to the gloom, however, European wholesale gas rose about 5%, extending a surge in the previous session after Germany temporarily halted the certification process for Nord Stream 2, a major new pipeline bringing Russian gas into Europe. Soaring gas prices have raised concerns around cost pressures building across the continent.

“The longer the shortfall of Russian flows into Northwestern Europe lasts, the longer…gas markets will have to rely on high gas prices,” said Goldman Sachs in a note, warning that the pipeline pause could worsen supply uncertainty in Europe.

Polish parcel locker firm InPost plunged 13.1% after lowering its full-year outlook citing slower-than-expected e-commerce market growth.

Travel and leisure stocks fell 1.2%, dragged down by Swedish online gaming company Evolution.

(Reporting by Anisha Sircar in Bengaluru; Editing by Shinjini Ganguli)

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