European stocks shelve second straight week of gains ahead of earnings’ season



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European stocks shelve second straight week of gains ahead of earnings’ season

Ahead of a likely upbeat earnings’ season for Q3, 2020, when a raft of European businesses had resumed operations following the glooms and dooms of a pandemic-scarred first quarter, a basket of European bourses had reported a second straight week of gains on Friday as blockbuster forecasts from Danish Pandora alongside Novo Nordisk had laid the groundwork of a brighter earnings’ season this week.

Apart from that, investors’ optimism over a fresh US pandemic relief bill had also tilted the market towards an affirmative territory, though on Sunday, the Trump Administration had called on Congress in a bid to pass a downsized pandemic relief bill as negotiations on a broad-based stimulus had repeatedly been running into resistance from the Congressional Democratic lawmakers alongside the US House Speaker Nancy Pelosi.

European shares rack up second consecutive week of gains ahead of earning season

In point of fact, Friday’s rally in the European markets was almost entirely goaded by optimisms over a crucial earnings’ season scheduled to begin as early as this week, while the European shares had been pushing higher throughout the week over hopes that the Democrats would win the November 3 US Presidential election and pass another round of trillion-dollar pandemic relief bill.

Notably, apart from a growing investors’ optimism over a lucrative earnings’ season alongside a bet on Biden winning the US Presidential election, a cascade of merger acquisition and a sharp turnaround of the heavily-beaten travel & leisure, financials and oil and gas stocks had been spurring up the regional markets, while the regional pan-European STOXX 600 ended Friday’s market 0.6 per cent higher, reporting a weekly percentage gain of 2.1%.

Citing statistics, on Friday’s European markets’ closing bell, London’s FTSE 100 rose 0.65 per cent to 6,016.65, French CAC 40 surged 0.71 per cent to 4,946.81, while Frankfurt’s DAX added 0.07 per cent to wrap up the week at 13,051.20.

Elsewhere in the Europe, Italy’s FTSE MIB added 0.06 per cent to 19,595.38, while Madrid’s benchmark IBEX 35 had winded the day 0.60 per cent lower to 6,950.90. Meanwhile, addressing to a likely upbeat earnings’ season ahead for the European markets, a head strategist at Edison Investment Research, Alastair George said, “Even though we’ve had rising infection rates in developed markets for the best part of the month, there hasn’t been any negative impact on consensus earnings forecasts.

As long as strict lockdowns can be avoided, equities are likely to continue to make progress on the back of very loose monetary policy and global stimulus packages as well.