Inditex gains on November sales after European shares flatten out
The European stock market ended Wednesday with a largely stable performance, helped by technology gains that countered sharp declines in the financial sector. Inditex, on the other hand, surged to an almost one-year high after a successful start to winter sales.
The pan-European STOXX 600 index closed 0.08% higher, at 576.13, while the major regional indices in Germany, France, and Italy each fell by 0.1%.
Inditex, Zara's owner, reported a currency-adjusted growth of 10.6% for November, which includes Black Friday weekend. Inditex beat expectations at the beginning of the fourth quarter.
The stock was the top performer in the STOXX 600, and it pushed up the retail sub-index by 3.5%. Inditex, widely regarded as a bellwether of global fast fashion, provided an early indication on how retailers performed during the crucial discounting period and indicated a strong start to its biggest revenue quarter.
Black Friday is crucial to the strength of retail. The fact that today's composite Eurozone PMI index was revised higher than the November PMI tells us that the industrial sector, basic materials, etc., are benefiting from this positive data. Axel Rudolph is a senior technical analyst with IG Group.
The Euro Zone business activity reached a new high of 2.5 years in November, as the strength of services offset manufacturing's weakness. The composite PMI rose to 52.8 from 52.5. The Services PMI rose to 53.6 in November, the highest level since May 2023.
The technology stocks continued to rise for the fourth consecutive session, gaining 1.3%. Defence stocks rose 2.3%, after Russia stated that the U.S. led Ukraine peace plan does not meet its needs yet.
Yulia Shvyrydenko, Ukraine's prime minister, hailed Wednesday the European Commission's proposal to cover Ukraine's financial needs as an "important and responsible step."
Basic Resources stocks rose 2.6%, and the energy sub-index increased 0.6%.
After a strong rally, the STOXX 600 index saw gains from insurers and banks cap, with a decline of 1.4% and 0.9 %, respectively.
Some weak data and dovish remarks from Federal Reserve policymakers are among the factors that have driven gains in the markets in November.
"Markets should take this as a reassuring sign because the Fed rate reductions are an important component of the positive narrative next year... It's going be the main catalyst," Kiran Ganesh said, multi-assets strategist at UBS Global Wealth Management.
Data released on Wednesday showed that the U.S. service sector remained stable in November while private payrolls dropped unexpectedly in November.
Hugo Boss, a German fashion company, fell 9.9% among other stocks after it warned that its sales will fall next year due to a strategic re-set.
Airbus shares rebounded 4% after a two day slump, after the plane maker trimmed its target delivery by 30 jets while reaffirming its financial guidance for 2025.
Sainsbury's fell 4.1% as Qatar's sovereign fund sold a larger chunk of its stake. This ended its nearly two-decade long reign as the company's largest shareholder. Reporting by Anastasiia Kozolova, Purvi agarwal, and Tharuniyaa lakshmi, Editing by Mrigank dhaniwala and Alexandra Hudson
(source: Reuters)
