Upgrade Now

Europe close: Stocks jump, German issues spearhead gains

By Alexander Bueso

Date: Friday 11 Oct 2019

Europe close: Stocks jump, German issues spearhead gains

(Sharecast News) - European stocks finished higher on Friday as investors grew hopeful that the US and China could agree a trade deal and after European Union Council chief Donald Tusk sounded a guardedly positive note on the outlook for Brexit negotiations.

By the end of trading, the benchmark Stoxx 600 index had added 2.31% to 391.61, Germany's DAX jumped by 2.86% to reach 12,511.65 and France's CAC 40 was 1.73% firmer at 5,665.48.

Overnight, the US President Donald Trump said that trade talks with China were going "really well".

Han Tan, market analyst at FXTM, said: "Investors are ready to celebrate any form of a US-China trade deal, even an interim one, having endured trade-related volatility since May. The amount of market fanfare will correspond with the contents of the actual deal, assuming one will be announced later today.

"Investors are in sore need of a solid pick-me-up beyond mere whispers of a trade pact, and a formal agreement is likely to sustain risk sentiment for the rest of 2019. Still, investors are cognisant that a trade pact that marks a pause in tariff hikes without rolling back any of the tariffs imposed since last year would not solve all of the global economy's existing problems."

Optimism over Brexit negotiations also helped to underpin the tone following positive comments from European Council President Donald Tusk.

In a televised statement in Cyprus, Tusk said: "Unfortunately we are still in a situation in which the UK has not come forward with a workable, realistic proposal."

However, he also said he had received "promising signals that a deal is still possible" from Irish premier Leo Varadkar, who met with UK Prime Minister Boris Johnson on Thursday.

"Technical talks are taking place in Brussels as we speak. Of course there's no guarantee of success and the time is practically up, but even the slightest chance must be used," Tusk said.

David Cheetham, chief market analyst at XTB, said the comments "were far more constructive than has been the norm of late from Tusk".

On the corporate front, German software company SAP surged on the back of well-received third-quarter results and as it announced the departure of chief executive officer Bill McDermott.

Elsewhere, the Stoxx 600 oil and gas sub-index was up 1.83% at 311.37 as oil prices jumped following news reports that an Iranian oil tanker had been struck by two missiles in the Red Sea near Saudi Arabia. West Texas Intermediate was up 1.45% at $54.3 a barrel and Brent crude was 1.84% higher at $60.22.

On the downside, shares of French advertising giant Publicis slumped after it cut its 2019 sales outlook again due to client losses in its US advertising business.

German luxury fashion brand Hugo Boss also suffered heavy losses after downgrading its 2019 earnings forecast.

..

Email this article to a friend

or share it with one of these popular networks:


Top of Page