DailyFX European Market Wrap: Earnings and Sales Steer Market Activity
With one eye keenly positioned to monitor the geopolitical developments, that have given direction to the markets of late, investors are also being tempted into equities in Europe via the auto sector.
Volkswagen, Renault, Peugeot Citroen, BMW are all beneficiaries from an unexpectedly strong auto sales report for Europe for the month of March. This and word that China is giving all the right indications for future demand from the sector is helping the sector.
Outside of this London is suffering from the twin effects of a drop in sentiment for mining and energy stocks which, added to the two day strength in sterling, has seen the FTSE 100 under perform for a second day in a row.
Added to the woes in the UK benchmark, the stock of Burberry was the worst performer out of the gate after it reported that its US division under-performed and that sales in the most recent quarter disappointed investors. This despite what Burberry management said was an 'exceptional' performance in the UK.
Finally Associated British Foods gave London a lift after it reported a better than expected 35% rise in pretax profits, driven in part by its discount fashion chain Primark. It did warn, however, that while the drop in sterling was beneficial for overseas earnings because it imports many of its raw materials into the UK for its foods business, this was having a dampening effect.
--- Written by Jeremy Naylor, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.