By Barbara Kollmeyer
European stocks rose on Wednesday, lifted by gains for resource stocks and apparel makers. Underpinning markets were upgraded growth forecasts from the European Union.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -1.14% rose 0.7% to 459.07. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -1.26% gained 1.1%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -1.20% was 0.2% up and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -1.07% rose 0.4%.
U.S. stocks /zigman2/quotes/210598065/realtime DJIA -3.57% /zigman2/quotes/210599714/realtime SPX -4.04% /zigman2/quotes/210598365/realtime COMP -4.73% were modestly lower. Job openings and the minutes of the most recent Federal Open Market Committee meeting are in the spotlight for Wednesday.
Data in Europe showed, German industrial production unexpectedly fell in May , missing expectations for an increase, according to statistics office Destatis said Wednesday. But the European Union lifted its growth expectations for 2021 and 2022 , citing stronger-than-expected activity in the first quarter and easing of pandemic restrictions in the second.
U.S. crude prices /zigman2/quotes/211629951/delayed CL.1 -1.21% and international benchmark Brent bounced around, before tumbling more than 2.5% each, taking energy shares with them. Crude benchmarks pulled back Tuesday on the heels of hitting levels last seen in 2014 after talks between the Organization of the Petroleum Exporting Countries and its allies collapsed amid a deadlock over increasing production.
Shares of Royal Dutch Shell climbed 3% in early trading before giving up gains and trading 0.5% down. The energy giant said Wednesday that it will boost total shareholder distributions to 20%-30% of cash flow from operations beginning with the announcement of second-quarter results, due later this month.
Mining stocks also gained, with Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO -1.79% /zigman2/quotes/202627887/composite RIO -3.32% rising 1.9% and BHP /zigman2/quotes/206213719/delayed UK:BHP -1.60% /zigman2/quotes/208108397/composite BHP -2.64% up 2.7%.
Sportswear makers got a boost, led by a 1.9% rise for shares of Puma /zigman2/quotes/203655455/delayed XE:PUM -5.01% , while shares of rival Adidas /zigman2/quotes/206448829/delayed XE:ADS -3.99% rose 2.5%.
The gains also came after a positive note on sportswear makers by HSBC that suggested investors buy Nike /zigman2/quotes/203439053/composite NKE -5.63% and Puma and upgraded Adidas to buy from hold. Analysts Erwan Rambourg and Anne-Laure Bismuth said they had lifted estimates on those stocks considerably, the biggest for Nike given an “impressive shift in the model.”
Puma makes the kits of the Italian national football team. Italy beat Spain 4-2 on penalties at Wembley Stadium on Tuesday to move onto the final of the UEFA Euro 2020 championship, where they will play either England or Denmark at the same stadium on Sunday.
“While Puma is always more difficult to fathom from a valuation perspective, we believe fundamentals should continue to impress. adidas has underperformed the other two for the past few months, probably because the company is the most exposed to Greater China from a profit perspective, but we believe therisk/reward here is a lot more compelling now,” said the analysts.
EDF /zigman2/quotes/201783867/delayed FR:EDF +0.53% lifted its earnings target for the year after raising its expectations for nuclear output in France. Shares of the French energy company rose 2.4%.
Some technology stocks were rising after Nasdaq gains on Tuesday, with shares of business software giant SAP /zigman2/quotes/202053813/delayed XE:SAP -2.60% /zigman2/quotes/207905606/composite SAP -5.88% up 3.5%.