Europe close: Stocks rise for sixth day despite French uncertainty
By Benjamin Chiou
Date: Thursday 05 Dec 2024
(Sharecast News) - European stocks rose for the sixth straight day on Thursday, helped by an impressive surge in Milan and Madrid, though political instability in France kept a lid on gains.
After a tentative start, the Stoxx 600 rallied in afternoon trade to finish 0.4% higher at 519.53 - a level not seen since 28 October.
The FTSE MIB in Milan and IBEX 35 in Madrid both surged 1.6% during the session on the back of strong gains in the banking sector, while markets in Frankfurt, Paris and London rose just 0.6%, 0.4% and 0.2% respectively.
Political uncertainty in France was continuing to dominant headlines after extreme right lawmakers combined with left-wing rivals to depose Prime Minister Michel Barnier's minority government in a no-confidence vote over his controversial Budget.
Barnier resigned on Thursday afternoon after only three months in office, making him the shortest serving prime minister in French history. He was brought down for forcing through his austerity measures without a parliamentary a vote. The draft budget contained €60bn in savings to cut the country's deficit.
"The next prime minister will still face the difficult tightrope of dealing with a ballooning budget deficit while potentially seeking a deal with another party, such as the National Rally, to remain in power and get a much-needed budget approved. Either way, France's political and economic backdrop remains shrouded in uncertainty," said Kate Marshall, senior investment analyst at Hargreaves Lansdown.
In economic news, the eurozone's construction sector slowed in November, with the HCOB construction PMI falling to 42.7, down on October's 43.0.
Meanwhile, retail sales in the single-currency bloc fell for the first time in four months in October, according to Eurostat. Adjusted volumes of retail trade decreased by 0.5%, reversing a 0.5% gain in September.
Market movers
Strong gains for banking stocks were lifting markets in Milan and Madrid, with Spanish lenders Banco Santander, Banco de Sabadell, BBVA, CaixaBank and Unicaja Banco all rising at least 3.5%, and Italian peers UniCredit, BPER Banca and Banco BPM putting in decent gains.
In Spain, the CNMV (National Stock Market Commission) said on Thursday that it would wait for the results of a competition review looking into BBVA's hostile takeover of Sabadell before it decides on whether to approve the bid.
London-listed Watches of Switzerland surged 14% as it reported a jump in first-half revenue amid solid US demand, but a dip in profit.
Aurubis shares spiked 11% as the German ferrous metals supplier and copper recycler post upbeat annual earnings amid a volatile market.
Kit meal producer HelloFresh also jumped 11% after Jefferies upgraded the stock to 'buy' from 'hold' and hiked its target price to €16.50 euros from €7.50, saying it expects revenues to stabilise next year and return to growth in 2026. The news boosted fast food delivery companies such as Just Eat Takeaway and Delivery Hero.
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