Euro holds above $1.18 after eurozone growth data
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Stocks in Europe gained ground Tuesday, as trading in August kicked off with shares of BP PLC climbing after the oil major's earnings report, and as data showed rising economic growth in the eurozone.
The Stoxx Europe 600 tacked on 0.5% at 379.73. Energy and industrial stocks lead advancers, but only the health care sector was slightly lower. The pan-European index on Monday slipped 0.1% (http://www.marketwatch.com/story/european-stocks-gain-as-miners-strengthen-inflation-data-on-tap-2017-07-31) to close at its lowest since April.
Energy boost: The oil and gas sector leapt a collective 1.6% as BP shares (BP.LN)(BP.LN) claimed a 3.6% rise. The oil producer swung to a profit of $553 million in the second quarter (http://www.marketwatch.com/story/bp-swings-to-profit-on-higher-crude-prices-2017-08-01), demonstrating its ability to generate cash again. Oil and gas production at the energy major rose 9.9%.
Crude oil prices , meanwhile, were modestly higher, extending a rally (http://www.marketwatch.com/story/oil-hovers-above-52-a-barrel-as-investors-grow-confident-of-tightening-market-2017-08-01) driven by growing optimism that the oversupply in the global oil market is now easing.
GDP in focus: The first reading of second-quarter gross domestic product in the eurozone came in at 0.6% growth quarter-over-quarter and at 2.1% year-over-year. Those figures matched expectations in FactSet survey of economists and compare with a reading of 0.5% growth in the first quarter.
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While no breakdown for eurozone GDP has been released yet, domestic demand continues to be an important driver of growth, said Bert Colijn, senior economist at ING.
"Especially, the recovery in investments has been strong over recent quarters and has likely continued to boost GDP growth in the second quarter," Colijn said in a note. "On the back of an accelerating jobs recovery and the highest consumer confidence since 2001, consumption is likely to have contributed significantly to growth as well."
"The recent appreciation of the euro is therefore unlikely to slow the current expansion significantly for the moment, given the domestic strength of the economy," he said.
The euro was little changed at $1.1818 after the data, but held above the $1.18 level it crossed above late Monday for the first time since January 2015. It settled at $1.1843 Monday in New York.
A stronger euro can make products from European exporters for expensive for their overseas clients to purchase. Each 10% on the euro takes 6 percentage points off per-share earnings growth, Credit Suisse said in a research note last week.
Stock movers: Advancers included Royal DSM NV (DSM.AE) , as its shares bulked up 6/3%. The Dutch chemicals and pharmaceuticals company said it's on track to surpass its targets for the year (http://www.marketwatch.com/story/royal-dsm-profit-up-21-lifts-2017-targets-2017-08-01) as it reported a 21% rise in second-quarter net profit.
Individual indexes: France's CAC 40 index rose 0.6% to 5,125.79, and Germany's DAX 30 gained 0.5% to 12,183.48.
The U.K.'s FTSE 100 surged 0.8% to 7,432.24 (http://www.marketwatch.com/story/ftse-100-marches-higher-as-bp-rolls-royce-shares-advance-2017-08-01), and Spain's IBEX 35 was pulled up 0.8% to 10,585.40
See:July's best-performing assets--in charts (http://www.marketwatch.com/story/julys-best-performing-assetsin-charts-2017-07-31)
(http://www.marketwatch.com/story/julys-best-performing-assetsin-charts-2017-07-31)Also:The S&P 500 and DAX are parting ways and that could set stocks up for a tumble (http://www.marketwatch.com/story/the-sp-500-and-dax-are-parting-ways-and-that-could-be-bad-for-wall-street-2017-07-31)
(END) Dow Jones Newswires
August 01, 2017 06:08 ET (10:08 GMT)