(Reuters) – European stocks rose on Tuesday as strong earnings from wealth manager UBS and auto parts maker Autoliv added to a string of upbeat corporate updates, while the International Monetary Fund raised its forecast for global growth in 2021.
The pan-European STOXX 600 index closed up 0.6%, with a rally in automakers, industrial companies and SAP and helping the German DAX outperform.
UBS rose 2.4% as high levels of client activity helped the world’s largest wealth manager record a 137% rise in net profit.
The broader financial services index gained 1.8%, with Swedish buyout group EQT jumping 14.6% after it signed a deal to buy global real estate investment manager Exeter Property Group for $1.87 billion.
The STOXX 600 tumbled to a two-week low on Monday after data painted a gloomy picture of Europe’s economy in January as many countries tighten curbs to combat new variants of the coronavirus.
“The numbers that are coming out show economic activity in Europe is falling back and underperforming other parts of the world,” said David Miller, investment director at Quilter Cheviot.
“So far, investors are prepared to look through the current difficulties on the basis that second half will be better.”
Supporting the sentiment, the International Monetary Fund raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn in 2020 would be nearly a full percentage point less severe than expected.
Italy’s FTSE MIB rose 1.2% after Prime Minister Giuseppe Conte handed in his resignation to the head of state, hoping he would be given an opportunity to put together a new coalition and rebuild his parliamentary majority.
Conte lost his absolute majority in the upper house Senate last week when a junior partner, the Italia Viva party quit in a row over the various issues.
Boosting Milan’s bourse, UniCredit jumped 4.5% after reports it set to appoint Andrea Orcel, one of Europe’s best known investment bankers, as its new chief executive.
Sweden’s Autoliv gained 5.3% after it reported higher than expected quarterly earnings, boosted by a recovery in car production.
Industrial gas producer Linde rose 3.5% after announcing an increase to its quarterly dividend and a $5-billion share buyback programme.
Spanish pharmaceutical company PharmaMar surged 21.1% after peer review journal Science published a paper that confirmed its drug plitidepsin has a “potent preclinical efficacy” against the COVID-19.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Lisa Shumaker)
