Europe close: Gains for stocks limited by gloomy corporate updates
By Alexander Bueso
Date: Tuesday 05 Nov 2019
(Sharecast News) - European stocks finished slightly higher on Tuesday as disappointing corporate updates from the likes of Pandora and Siemens Gamesa overshadowed growing optimism over a US-China trade deal.
By the end of trading, the Stoxx 600 was 0.20% higher at 404.23, with Germany's Dax roughly unchanged and trading up by 0.09% to 13,148.50 and the French CAC 40 ahead by 0.39% to 5,846.89. Meanwhile, London's FTSE 100 was 0.25% higher at 7,388.08.
Shares in Pandora tumbled after the Danish jeweller missed third-quarter profit expectations and cut sales forecasts following lower spending in the US and Britain, along with political unrest in Hong Kong.
Meanwhile, Siemens Gamesa was sharply lower as the turbine maker reported strong annual revenue and profit growth but cut revenue guidance for its new financial year due to adverse factors affecting the wind industry. Danish turbine manufacturer Vestas Wind Systems was also down following the warning.
Hugo Boss reversed early gains to fall into the red after missing third-quarter profit forecasts, though the German fashion house said it expected revenue and operating profit to recover in the final portion of the year due to growth in sales online and in China.
Gloomy corporate news meant stocks were unable to push higher despite trade hopes, after the Financial Times reported that Washington is considering rolling back some of the tariffs it introduced on Chinese imports on 1 September.
Citing five people briefed on the discussions, the FT reported that the White House is considering rolling back levies on $112.0bn of Chinese imports, including clothing, appliances, and flatscreen monitors, that were introduced on 1 September at a 15% rate.
Oanda analyst Craig Erlam said that removing $112.0bn of Chinese tariffs in order to get a deal over the line was a clear sign that Trump is keen to get a win after years of talk, while any deal is unlikely to be as one-way as was initially sold.
"Regardless, as far as investors are concerned, it's a massive win and further alleviates recession fears that gripped the markets earlier this year. If the two sides can get this deal over the line in the coming weeks, the Santa rally may well come early this year," added Erlam.
On the upside, Swiss travel retailer Dufry was the top riser on the Stoxx 600 after it reported strong organic third-quarter growth.
Oerlikon climbed after the Swiss industrial group expressed confidence in achieving full-year targets and announced a share buyback programme.
Finally, Danish pharmaceutical company Lundbeck followed close behind after it raised annual revenue and earnings guidance following a better than expected third quarter sales performance.
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