Europe close: Stocks surrender early gains
By Alexander Bueso
Date: Monday 19 Oct 2020
(Sharecast News) - European shares gave up early gains as the impetus provided by upbeat earnings reports and strong China GDP data faded going into the close of the session.
The pan-European STOXX 600 index was down 0.18% to 366.81, having been up 0.78% in early trade. London's FTSE 100 was lower by 0.59% at 5,884.65, weighed down by gains for sterling and Germany's DAX fell 0.42% to 12,854.66, with other major bourses marginally lower.
China's economy grew 4.9% between July and September compared to the same quarter last year, coming in weaker than economists' expectations for 5.2% growth.
Luxury stocks such as LVMH and Hermes, reliant on wealthy Chinese customers, rose on the news.
Across Europe, Covid-19 curbs were being reintroduced as government's battled to quell the latest wave of the pandemic.
"Rising case numbers across Europe is raising the risk of a second recessionary wave, but ample central bank support means we are holding the September - October range," said Markets.com chief analyst Neil Wilson.
"Meanwhile in the US, House Democrat leader Nancy Pelosi said she is 'optimistic' about getting a pre-election stimulus deal agreed. Lots of chatter around this dictating some of the price action but not a lot of substance - what we do know is that some kind of stimulus package is on its way."
In corporate news, shares in workspace provider IWG topped the leaders board after Berenberg upgraded its stance on the stock to 'buy' from 'hold' lifting the price target to 350p from 260p as it said the risk/reward investment case is now skewed materially to the upside.
"Given an impressively resilient H1 performance, announced cost savings, and the roll-off of a variety of one-off costs in this year's P&L, we now believe that the company will be able to recover to pre-pandemic levels of profitability as soon as 2021," Berenberg said in a note to clients.
Shares in health technology company Philips rose as the company reported a much better-than-expected 32% jump in core earnings.
Julius Baer shares were up after the bank indicated an improvement in profitability for the first nine months of 2020 as client activity increased and it cut costs.
Shares in Danone were also higher as the world's largest yoghurt maker reinstated its 2020 forecasts and launched a review of its assets.
Italian infrastructure operator Atlantia rose as the company agreed to sell a 49% stake in its highway toll-collection business Telepass to investment manager Partners Group for €1.06bn.
Swedish defence company Saab shares fell more than 14% as the company reported a fall in third-quarter profits and repeated that it could not confirm its full-year guidance due to the uncertainty caused by the pandemic.
Saab's adjusted operating profit fell to SEK445m (£38.8m) from SEK518m a year ago, while order bookings increased 8% to SEK10.15bn.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN