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European stocks rally as Tesla crosses $1trn

By Indrabati Lahiri

11:04, 26 October 2021

Stocks chart
European stocks saw healthy gains on Tuesday – Photo: Shutterstock

European stocks gained on Tuesday morning, with the Euro Stoxx 50 touching a 6.5-week peak, while US markets closed at an all-time high on Monday, as big tech stocks took the lead.

UK stocks also climbed after strong third-quarter earnings from UBS, which significantly boosted investor confidence. Investors were also looking forward to the UK Budget on Wednesday.

Image of stocks chartStocks chart – Photo: TradingView

Why are stocks up today?

The rise in stocks is primarily due to Tesla crossing $1trn in value, causing US markets to hit an all-time high yesterday and send positive ripples across European and UK markets. Tesla has benefitted from Hertz placing a massive order of 100,000 cars for its rental fleet, shooting Tesla’s share value skyward. The Euro Stoxx 50 also hit a 6.5-week high, on account of continuing strong earnings from the banking sector, with UBS being the latest to announce good third-quarter earnings.

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Market highlights

  • UK’s FTSE 100 inched up 0.62% on Tuesday, boosted by strong earnings from UBS.
  • The Euro Stoxx 50 index also climbed up 0.71%, after US markets hit an all-time high yesterday.
  • Brent crude oil traded at $85.46, down by 0.62%, retreating from the recent speculations that oil could soon touch $100 per barrel.

Market sentiment

  • The CBOE Volatility Index, or VIX, a measure of expected fluctuations in US stocks, dropped to 14.91, indicating a decrease in market anxiety and rising investor confidence.
  • The US dollar index also fell slightly to $93.96, reflecting a decrease in the demand for safe assets as investor confidence rises with rallying stock markets.
  • The 10-year US bond yield index also fell for the third consecutive day to $1.647, indicating a stabilisation of inflation anxieties for the time being.

Top stock gainers: UK and Europe

  • In the UK, the best performing sectors were consumer non-durables, transportation and consumer services.
  • Reckitt Benckiser, International Consolidated Airlines Group and Compass Group led gains in their respective segments.
  • In Europe, the top gaining sectors were semiconductors, postal services and insurance.
  • ASML NV, Deutsche Post and Munich Re were the best performers in their respective segments.

Top stock losers: UK and Europe

  • On the FTSE 100, the worst performing sectors were retail, non-energy minerals and commercial services.
  • Ocado Group, Polymetal International and Rentokil Initial led the losses in their respective segments.
  • On the Euro Stoxx 50, the segments that took the biggest hits were optical equipment, electric utilities and energy.
  • EssilorLuxottica, Iberdrola and Schneider Electric were lagging in their respective sectors.

Top news

  • Swedish engineering group Alfa Laval shares gain after launch of investment plan.
  • Indian banker Canara Bank triples profits in second quarter.
  • London’s Heathrow airport releases passenger growth data for the first quarter since 2019.
  • Alibaba Health stock falls over expectations of half-yearly losses.
  • UK distribution firm Bunzl reports higher third-quarter earnings and expectations of growth for the rest of the year.

Read more: Swiss bank UBS sees double digit rise in third quarter profits

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