Europe close: Italian issues pace gains after regional election results
By Alexander Bueso
Date: Tuesday 28 Jan 2020
(Sharecast News) - Stocks on the Continent staged a modest bounce on Tuesday despite some analysts' warnings that financial markets might be underestimating the impact of the new Coronavirus in China.
"The Chinese central bank has made it clear it is willing to use monetary tools in a bid to lift economic sentiment, should they feel it is required. The message from Beijing reassured traders somewhat, but the acid test will be whether the rebound lasts or not," said David Madden at CMC Markets UK.
Analysts at Rabobank were also cautious, emphasising to clients how China's share of the world economy had nearly quadrupled since 2003 SARS virus to hit 15.8%, meaning that the shockwaves from slower-than-expected growth were potentially far larger than during that episode two decades before.
By the end of trading, the benchmark Stoxx 600 was 0.84% higher to 417.56, alongside a gain of 0.90% to 13,323.69 for the German Dax and a jump of 2.61% to 24,027.63 on the FTSE Mibtel.
Stoking gains in Italian issues was the rally in the country's debt in the wake of the elections at the weekend in the Emelia-Romagna region.
In parallel, front month Brent crude oil futures reversed early losses and were up by 0.7% to $59.74 a barrel on the ICE.
Citing sources from within the cartel itself, Reuters reported that the Organisation of Petroleum Exporting Countries wanted to extend its oil output cuts until at least June, with bigger curbs possible if China's economy were significantly impacted the nCoV Coronavirus.
By sectors, the best-performing areas of the market were precisely those that were hit hardest during the previous session's drubbing, such as Basic Resources, Travel&Leisure and Autos&Parts.
Topping gains on the Stoxx 600 was Swedbank despite what analysts at Jefferies termed a 'low-quality' beat on fourth quarter earnings thanks to trading income.
Italy's Atlantia was right behind after in remarks to Radio 24, Italy's deputy minister for transportation appeared to leave the door open to the government not revoking Autostrade's toll-road concessions.
Airbus was also higher on news that the planemaker had decided to settle with French, British and American authorities in a probe into alleged bribery and corruption.
Atlas Copco was one of the worst performers after the Swedish maker of industrial tools guided towards a near-term dip in demand, although its fourth quarter return on capital employed remained at a lofty 30.0%.
Shares of Dutch health technology outfit Philips traded lower after posting a lower-than-expected fourth quarter increase in sales of 3.3% (consensus: 5.2%) and announcing the possible sale of its kitchen appliance unit.
STMicro gained ahead of client Apple's results on Tuesday night and despite a report in Nikkei that iPhone ramp up plans could be disrupted by the Chinese coronavirus.
No major economic reports were released in Europe on Tuesday.
CAC 40 - Risers
ST Microelectronics (STM) 27.06 +3.52%
Carrefour (CA) 15.68 +2.99%
LVMH (MC) 412.00 +2.74%
ArcelorMittal SA (MT) 13.95 +2.68%
Peugeot (UG) 19.13 +2.11%
Michelin (ML) 106.15 +1.92%
Kering (KER) 561.80 +1.66%
Essilorluxottica (EL) 138.00 +1.55%
Vinci (DG) 101.15 +1.50%
Air Liquide (AI) 129.40 +1.41%
CAC 40 - Fallers
TECHNIPFMC (FTI) 15.50 -2.67%
Capgemini (CAP) 116.90 -0.89%
Dassault Systemes (DSY) 159.90 -0.47%
Pernod Ricard (RI) 158.00 -0.38%
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