Salem Radio Network News Friday, September 29, 2023


European shares tick higher; Aegon leads gains among insurers

By Shreyashi Sanyal

(Reuters) -European shares edged higher on Thursday after a strong rally in the previous session on signs of U.S. inflation cooling, while Aegon climbed after the Dutch insurer raised its full-year forecast.

The pan-European STOXX 600 index rose 0.1%, after clocking its best session in nearly two weeks on Wednesday on bets that the softer-than-expected inflation reading will encourage the Federal Reserve to become less aggressive on interest rates hikes.

“The markets are riding higher on the fact that the peak has been passed in terms of inflation in the United States,” said Sebastian Paris-Horvitz, head of research at La Banque Postale Asset Management.

Gains were limited by losses in miners, down 0.7% and the top sectoral decliner on weak results from Antofagasta. The company’s shares fell 1.3% and dragged peer Rio Tinto down 3.8%.

The STOXX 600 is down about 9% so far this year, compared with a more than 11% decline for Wall Street’s S&P 500 index. U.S. equities are heavily dependent on moves in big technology stocks, which fell sharply in the first half of the year on worries over rising interest rates.

“The big decline in global markets in the first quarter was associated with these big growth stocks in the U.S. falling, and therefore Europe, which is less heavy on those, outperformed,” Paris-Horvitz added.

Still, Europe is struggling with the fallout of the war in Ukraine as it looks to source energy from non-Russian sources.

Germany, often referred to as the European Union’s economic engine, is also struggling with scant rainfall. Low water levels on the Rhine, Germany’s commercial artery, have disrupted shipping and pushed freight costs up more than five-fold.

Among other stocks, Aegon jumped to the top of the STOXX 600 with an 8.2% gain after raising forecasts for full-year operating capital generation and 2021-2023 free cash flow.

The European insurance sector index advanced 0.8% in early trading, and was among the top gainers.

Zurich Insurance Group also added 1.7% as it reported a better-than-expected rise in operating profit in the first half.

Siemens dropped 1.5% after the engineering and technology group said a writedown at Siemens Energy resulted in its first quarterly loss in nearly 12 years.

Deutsche Telekom gained 0.9% as it lifted its annual outlook for the second time and posted quarterly core profit above estimates.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)


Editorial Cartoons

View More »

Gary Varvel
Tue, Sep 19, 2023