European Shares Rise Amid Trade Optimism; Orsted Shares Plunge on $9.4 Billion Rights Issue

European stock markets opened higher on Monday, buoyed by positive sentiment around global trade developments. The pan-European Stoxx 600 index rose by 0.3%, with most sectors showing gains. London’s FTSE 100 led regional advances, also increasing by 0.3% at market open, reflecting investor optimism.

However, Orsted, a major wind farm developer, experienced a sharp drop in its share price, plunging more than 25%. The steep decline followed the company’s announcement of a planned 60 billion Danish kroner ($9.4 billion) rights issue. This move came after a significant setback in the U.S. market, which forced Orsted to abandon its plan to raise funds via a partial divestment of its Sunrise Wind project off New York.

As Europe’s corporate earnings season nears its end, Deutsche Bank research highlights a 10% downward revision in full-year earnings estimates since late 2024. Despite this, a notable number of companies have raised their second-quarter guidance, with over a quarter of firms upgrading outlooks, signaling pockets of resilience.

Companies that downgraded forecasts primarily belong to the chemicals and automobile sectors, citing challenges like tariffs and foreign exchange pressures. Looking ahead, Deutsche Bank remains cautiously optimistic, emphasizing improved trade visibility following a recent EU-U.S. trade agreement, which could help companies raise their lower-end guidance.

Overall, while some headwinds persist, the European market appears to be stabilizing with mixed corporate earnings signals and positive momentum from global trade developments. Orsted’s financial challenges remain a key outlier amidst a broadly upbeat opening session.

Source: CNBC