European shares continued their rally on Thursday from a strong selloff earlier this week, but were set for a monthly decline on concerns of a slowing global economy and high inflation.
The all-sector STOXX 600 index rose 0.6 percent, led by technology stocks, which were at the center of the market, while miners rose from sharp falls on concerns about China’s economy.
Defensive sectors such as real estate, healthcare and food and drink also grew.
European stock benchmarks are on track to lose 2.8 percent at the end of September after a seven-month winning streak, as a rise in government bond yields pushed investors away from high-growth sectors such as technology in financially sensitive banking and energy stocks. kicked out.
“The market’s recent move suggests a rotation is underway in favor of sectors and assets that benefit from consumption shifting from goods to services,” BCA analysts said in a note.
“Given that we do not expect rising interest rates to have a detrimental effect on the real economy in the coming 12-18 months, we recommend that investors maintain a moderately overweight allocation to stocks.”
A growing number of risks, including a tough stance by the US Federal Reserve, supply-chain bottlenecks and financial troubles at Chinese property developer Evergrande, weighed on sentiment this month, even as investors bet on a stagnant European economy.
The defensive-heavy Swiss market is one of the biggest falls this month, while banking-heavy Spanish and British indices remained upbeat.
Among individual stocks, Sweden’s H&M was flat when the retailer said sales were hit by supply disruptions in September, while spirits maker Diageo plc gained 2.5 percent after forecasting a boost to operating margins as people Opt for premium brands.
Swedish cloud communications services provider Cinch said it has agreed to buy cloud-based email delivery platform PathWire in a deal worth about $1.9 billion.
British online fashion retailer Boohoo plunged 10.7 percent as it warned that freight inflation and higher wages for its distribution center employees would hit profit margins for the full year.
by Shruti Shankar
This News Originally From – The Epoch Times