European shares close at record high on Airbus news

Published On: May 28, 2021Categories: Stocks & Shares1.3 min read

The pan-European Stoxx 600 index gained 0.3 per cent to 446.44 points, a record closing high

European shares closed at a record high on Thursday boosted by Airbus after the planemaker hiked its jet output targets, while German shares weakened after shares in pharmaceuticals maker Bayer were hit by a court ruling.

The pan-European Stoxx 600 index gained 0.3 per cent to 446.44 points, a record closing high.

French planemaker Airbus climbed 9.2 per cent after it set out sweeping goals to expand production of jetliners, as the airline industry recovers from the Covid-19 pandemic.

German shares lost nearly 0.3 per cent, lagging other regional markets, with Bayer the biggest drag on the DAX, dropping 5.0 per cent.

The stock marked its worst day in three months after a US judge rejected its class action plan to settle future claims related to its Roundup and other glyphosate-based weedkillers.

European shares have moved little this week, but achieved record highs as continued affirmations of easy monetary policy and waning worries over inflation painted a favourable picture.

However, investors have been moving into more cyclical parts of equity markets for protection from the risks of rising inflation.

The European banks sector nearly 2 per cent and basic resources climbed 3.0 per cent, leading sectoral gains on Thursday.

A rise in metal prices on concerns over supply disruptions in top copper producer Chile also helped mining stocks outperform.

We continue to expect a rapid recovery which has also been reflected in the robust performance of European and German companies in the first quarter earnings season, said Mark Haefele, chief investment officer of global wealth management at UBS in a client note.

We recommend that investors continue to position for the reflation trade and favour reasonably valued cyclicals that benefit from rising inflation and higher bond yields, he said.

About the Author: Jonathan Adams

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