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Europe close: Shares rise on trade war hopes

By Alexander Bueso

Date: Tuesday 12 Nov 2019

Europe close: Shares rise on trade war hopes

(Sharecast News) - European stocks were mostly higher on Tuesday after reports that US President Donald Trump will postpone plans for new trade tariffs.
By the end of trading, the Stoxx 600 was 0.38% higher at 406.90, as Germany's Dax climbed 0.65% to 13,283.51 and the French CAC 40 added 0.44% to 5,919.75. London's FTSE 100 was up 0.5% at 7,365.44.

Spain's Ibex 35 however was left out, retreating 0.87% to 9,306.70 after the country's Socialist PSOE party agreed to rule in coalition with far-left Podemos, although the new President, Pedro Sanchez, still required the support of multiple smaller non-nationalist regional parties in order to clinch an absolute majority.

In the background, reports suggested that Trump would use a speech at the Economic Club of New York later in the European afternoon to postpone the proposed 20.0% tariff on vehicles and auto parts imported from the EU and that he could reveal further details about the current state of Washington's ongoing trade negotiations with Beijing.

IG analyst Chris Beauchamp said: "Unlike the US-China spat, the US-EU argument has been much more muted, which at least provides hope that the US is going to avoid opening up a second front in the trade war, reasoning that a new conflict ahead of the next election might not be the wisest move."

Elsewhere, the ZEW Center for European Economic Research said its German economic expectations index improved to -2.1 from -22.8 in October, surpassing expectations for a reading of -13.0.

Pantheon Macroeconomics analyst Claus Vistesen said: "A very solid equity market, and hopes of a deal between the US and China that would actually de-escalate the trade wars likely are the two main drivers of the jump.

"That said, we suspect that the tentative evidence of a bottom in German manufacturing activity, and the reduced prospect of a no-deal Brexit, also are contributing."

Stock in French telecoms outfit Iliad surged after it confirmed plans to carry out a €1.4bn share buyback programme, while its third quarter revenues beat consensus expectations thanks to growing customer numbers.

Shares in Infineon also climbed after the German chip-maker reported a rise in fourth quarter profits despite an economic environment "fraught with uncertainty", with shares of fellow chip-maker Dialog Semiconductor following close behind after hiking its forecasts for margins.

German mail carrier Deutsche Post was among the top risers after it reported a jump in third quarter profits and said it expected the final months of the year to be driven by e-commerce and growth in its freight division.

Barry Callebaut dived after Jacobs Holding announced the successful private placement of its 2.85% stake in the company.

Swiss chemicals company Lonza dropped after confirming that chief executive Marc Funk will leave the company in January, having lasted less than a year in the role.

Finally, AMS was in the red as Osram Licht urged shareholders to vote in favour of a $4.4bn takeover bid from the Austrian sensor manufacturer.

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