Markets

European Equities Close Higher as Auto & Consumer Stocks Lift Shares

European equities closed comfortably higher on Tuesday fueled by a rally in the automobile and consumer sectors.

The rally came despite a 1.8% month-on-month contraction in new manufacturing orders in August in Germany, the Eurozone's largest economy. Although disappointing, the size of the contraction was smaller than the 2.2% fall recorded in July relative to June.

Federal Statistics Agency Destatis said that domestic orders decreased by 2.6% and foreign orders by 1.2%. With regard to the direction of trade in foreign transactions, new orders from the euro area were up by 2.5% on the previous month while new orders from other countries decreased 3.7%.

The data triggered speculation that slowdowns in some emerging market countries were beginning to hit Germany, which maintains an export-driven economic model.

In company news, consumer stocks trumped the day on London's FTSE 100 with supermarkets Morrison and Tesco advancing by 3.2% and 3.0%, respectively. Oil stocks also posted significant gains with Royal Dutch Shell gaining over 3% and BP advancing 2.7%.

Commodity trading and mining firm Glencore climbed 2.5% and hotel chain InterContinental Hotels Group rose by 1.3%.

On Frankfurt's DAX, carmaker Volkswagen led gainers, climbing 3.8%. Automotive parts suppliers Daimler and Continental rose by 2.5% and 1.5%, respectively and athletic clothing and footwear company Adidas was 1.5% higher and semiconductor company Infineon Technologies rose 1.0%.

And, on Paris' CAC-40, automobile makers Renault and Peugeot were 5.8% and 3.9% higher, respectively, while financial services company Credit Agricole advanced by 4.1%.

Telecommunication, media and construction conglomerate Bouygues gained 3.6% after publishing a statement outlining a positive mid-to-long-term outlook for Bougyues Telecom. The statement recognised that the telecom unit's customer base had seen a "significant reduction" in churn rate, cutting it 15% lower than the 2011 level in the first half of 2015. The company also set an EBITDA margin target of 25% for 2017 and 35% for the longer term.

And French media group Vivendi advanced by 1.6% after upping its stake in Italian telecommunications operator Telecom Italia to 19.9%. The company said that the total acquisition price in the consolidated accounts is 3.05 billion euros ($3.43 billion), representing around 1.14 euros per ordinary share.

The FTSE 100 rose 0.43%, the DAX advanced 0.90% and the CAC-40 gained 0.95%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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