FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 21, 2021. REUTERS/Staff
May 25, 2021
By Sruthi Shankar
(Reuters) -European stocks hit record highs on Tuesday, as a billion-dollar deal combining two of Germany’s biggest property developers and a rally in technology shares after soothing comments on inflation lifted investor sentiment.
The pan-European STOXX 600 index rose 0.3% to an all-time high of 446.47 points after it surpassed its early-May peak of 446.19.
Germany’s DAX gained 0.8%, hitting a record high after a long weekend, boosted by news that Europe’s largest residential property group Vonovia SE agreed to take over its rival Deutsche Wohnen for about 18 billion euros ($22 billion).
Deutsche Wohnen surged 15.5%, while Vonovia fell 4.1%. Europe’s wider real estate index added 1.7% to touch the highest level in over a year.
Technology stocks rallied 1.2% after their Wall Street peers climbed overnight on fresh insistence from U.S. Federal Reserve officials that loose policy would stay on hold.
A lessening of inflation fears saw euro zone government bond yields edge down for the third day in a row. [US/]
“In the last couple of days, bond yields have come down a little bit and that has allowed equity markets to breathe again,” said Roland Kayolan, European equity strategist at Societe Generale.
“We’re still in a phase where economies are reopening gradually in Europe and we should see better leading indicators in the coming months.”
Investors looked past data that showed German economy shrank more than expected in the first quarter as business morale improved in May, with companies turning more upbeat in the light of falling coronavirus infections and steps towards re-opening.
Europe’s STOXX 600 is up about 12% so far this year, largely in line with Wall Street’s S&P 500 as re-opening optimism lifted shares of economically sensitive sectors such as financials and energy.
Miners came under pressure as China said it would strengthen price controls of key commodities after warning against hoarding and speculation to cool a blistering rally in prices of industrial commodities.
HeidelbergCement AG gained 1.9% after U.S. construction materials supplier Martin Marietta Materials said it would buy the German company’s assets in California and Arizona for $2.3 billion.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Uttaresh.V and Arun Koyyur)
Source: One America News Network
