German DAX Heads for Bull Run as Europe Stocks Rise on Earnings

European stocks rose, with gains in Munich Re and carmakers helping push Germany’s DAX Index toward a bull market.

The DAX climbed 0.8 percent at 1:25 p.m. in Frankfurt, taking its advance since a February low to 20 percent, while the Stoxx Europe 600 Index added 0.3 percent. Munich Re climbed 3.9 percent after the reinsurer reported quarterly net income that was more than double the average analyst projection. BMW AG and Volkswagen AG climbed at least 1.3 percent after a report showed China’s retail auto sales surged in July.

After the turmoil triggered in June by Britain’s shock vote to exit the European Union, investors are showing calm. A gauge tracking volatility expectations in euro-area shares fell for a fifth day, extending its lowest level in a year. The Stoxx 600 climbed 1.8 percent in the past four sessions, boosted by better-than-forecast U.S. payrolls data and fresh stimulus measures announced by the Bank of England. The volume of shares changing hands today was 35 percent lower than the 30-day average.

“No news from the economic side means investors have an eye on the company side,” said Heinz-Gerd Sonnenschein, equity strategist at Deutsche Postbank AG in Bonn, Germany. His firm manages about 149 billion euros ($165 billion). “The markets are stable. If you have an eye on the volatility markets, we’re at very low levels. We had Brexit, we had the banking problems coming out of Italy, but the markets are stable now.”

 

Stock markets have seen a tentative return to bullishness in recent sessions amid optimism that central banks will act to protect economic growth and limit the fallout from Brexit. Since a June 27 low, the Stoxx 600 has rebounded 11 percent, and is about 1 percent away from its level on the day of the referendum. The DAX Index is up 2.5 percent since the referendum, and is rising for a fifth day.

Among other stocks active on corporate news today, Amec Foster Wheeler Plc jumped 13 percent, leading energy shares higher, after its revenue and earnings beat forecasts. Altice NV jumped 14 percent after its quarterly profit increased, while SFR Group SA rallied 10 percent after the holding company said it plans to reduce 5,000 jobs at the French phone-carrier.

Legal & General Group Plc slid 5.6 percent and Danish jeweler Pandora A/S fell 1 percent after they both reported profit that missed estimates.

Source: Bloomberg