European stocks surge on US midterm election results and corporate earnings

Rally on the back of the US elections

European stock indices closed sharply higher on Wednesday after the Democratic Party won control of the US Congress in the midterm elections, Anadolu reports. The benchmark Stoxx Europe 600 index rose 1.91% to 658.02. The region was led by Spain's IBEX 35, which gained 3% to 19,370.90; Germany's DAX rose 2.38% to 26,479.33, Italy's FTSE MIB gained 2.18% to 51,031.02, France's CAC 40 rose 1.96% to 8,177.89, and the UK's FTSE 100 added 1.79% to 10,829.21. The euro strengthened 0.32% against the dollar, to $1.123, by the close of European trading.

What moved the market

According to the outlet, investors saw the Democrats' victory in the Senate and the House of Representatives as a constraint on US President Donald Trump's ability to advance his legislative agenda. An additional driver of the rally was a nearly 9% drop in Brent crude to $94.47 per barrel, which eased concerns about energy costs. Earlier on Wednesday, Eurostat estimated annual inflation in the eurozone at 4% in October, up from 3.8% in September, with energy prices 20.8% higher than a year earlier.

Strong corporate earnings

Earnings that beat expectations also contributed to the gains. Shares of German building materials maker Heidelberg Materials rose 9.5% after it reported a 9% increase in quarterly operating profit to €1.28 billion and a 10% rise in revenue to €6.41 billion. Online marketplace operator Scout24 added 6.7% after raising its revenue guidance. BMW gained 5.5% despite a nearly 30% drop in third-quarter operating profit amid weakness in the Chinese market; auto parts supplier Continental added 5.2%. Healthcare group Fresenius climbed 5% after improving its full-year guidance, property developer Vonovia rose 3.6% on higher rental income, and energy company Uniper gained 3.4% after raising its outlook.