Burberry bounce helps to push European stocks to one-week high
By Sruthi Shankar and Amy Caren Daniel
(Reuters) - British fashion brand Burberry's shares jumped on Tuesday, lifting other luxury goods makers, while upbeat earnings from big Wall Street banks spurred gains for the region's lenders, driving major European markets to their highest closing levels in a week.
Burberry's shares (OTC: BRBY) surged 14.4%, their biggest one-day gain in 7 years, as quarterly results showed demand for new designs by creative chief Riccardo Tisci picking up.
Upscale retailers in Europe, including Hermes
Britain's FTSE 100 <.FTSE> rose 0.6%, as a weaker pound boosted London-listed multinationals. [GBP/]
The euro was also dented after data pointed to a deterioration in confidence among German investors, helping exporters on the pan-European STOXX index <.STOXX>, which rose 0.35% at 389.10, its highest closing level since July 8.
"It is ultimately a story on the dollar strength and European currency's weakness," said Joshua Mahony, senior market analyst at IG.
That will be a test for the recovery in stock markets since May on the back of expectations that an easing of central bank monetary policy globally would prop up consumer demand and avert a recession.
Companies listed on the STOXX 600 index are expected to report earnings growth of 0.2% in the quarter, among the weakest in years and down from 0.8% estimated a week ago, according to data from I/B/E/S Refinitiv.
"The question is how high market expectations are going into an earnings season that is expected to provide another batch of largely flat or negative earnings figures," IG's Mahony said.
"Business confidence is low, and global growth has taken a hit, so the forward looking outlook will be critical for traders."
(Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; editing by Patrick Graham and Jane Merriman)