Auto stocks rise as European shares soar in focus of earnings season

European stocks rose on Monday, as investors digested the latest round of earnings reports. Auto shares also gained amid optimism that Dutch chipmaker Nexperia will resume China shipments.

The pan-European STOXX 600 index rose 0.4%, to 574.11 by 0910 GMT. This is a rebound from the one-week-low hit last week.

After a White House announcement that Nexperia news will be announced soon, auto stocks like Renault, Mercedes Benz, and Aumovio each gained more than 3.3%. Nexperia was recently taken over by the Dutch government, owned and operated by Chinese company Wingtech. This prompted Beijing, to stop Nexperia from leaving China.

In this context, the auto industry as a whole had experienced its second consecutive month of declines. This is a welcome relief for European automakers after what has been a seemingly unending string of bad news. Chris Beauchamp said, "It's not a turn-around, but we are certainly looking for a little more support." Earnings continued into the new week. However, reports have shown that European companies still lag behind their U.S. counterparts in terms of growth. GTT rose 4.3% following the French LNG containment systems specialist's increase in its annual revenue forecast and core earnings.

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Upbeat

Boeing deliveries earlier than expected and strong demand in the first half of the year helped to boost its forecast for passenger traffic. The shares of Europe's biggest airline based on passenger numbers fell 2.4%.

Campari fell 2% in the meantime after Italian tax authorities said they had seized 1.29 billion euro ($1.5 billion) worth of assets from a Luxembourg-based holding firm that controls the Italian drinks company over allegations of tax evasion.

BP's share price rose by as much as 1,7% after it announced that the UK energy giant would sell the Permian midstream assets and Eagle Ford onshore oil and natural gas assets to Sixth Street funds for $1.5 billion.

Investors were disappointed by hawkish remarks from the U.S. Federal Reserve, and the lack of any signs that the European Central Bank would take a more dovish stance.

The STOXX 600 registered its fourth consecutive month of gains thanks to optimism about global trade following the thawing of Sino-U.S. tensions.

This week, interest rate decisions from central banks in Norway and Sweden will be the focus of attention. Reporting by Johann M Cherian from Bengaluru, editing by Sherry J. Phillips and Nivedita Bhattacharjee

(source: Reuters)