European Stocks Move Higher; Trade Talks In Focus
2/11/2019 8:26 AM
European markets were moving higher Monday with most of the indices scoring impressive gains as investors indulged in some brisk buying after recent losses.
The focus is on a fresh round of trade talks between the U.S. and China that began in Beijing today.
Markets are also closely tracking news on the Brexit front.
The pan European Stoxx 600 was gaining about 0.75%. Among major markets in Europe, France was up with its benchmark CAC 40 adding nearly 1%, Germany's DAX was rising 0.88% and the U.K.'s FTSE was advancing 0.7%. Switzerland's SMI was gaining around 1%.
Among other markets in Europe, Turkey, Sweden, Spain, Russia, Poland, Norway, Netherlands, Italy, Greece, Finland and Denmark are gaining 0.4 to 1.2%.
Portugal is up marginally, while Austria is modestly lower.
Despite weak GDP data, British shares were gaining ground in positive territory.
TUI AG, British American Tobacco, BHP, Rio Tinto and Glencore were also moving notably higher.
Smith & Nephew shares declined more than 4% on reports the company was in discussions to buy NuVasive, a surgical instruments maker based in the U.S. The deal is said to be worth more than US$ 3 billion.
In economic news, the UK economy expanded at its slowest annual rate in six years in 2018, following a sharp contraction in December.
In 2018, the economy grew 1.4%, down from 1.8% a year earlier, data from the Office for National Statistics showed.
Growth in October - December 2018 slowed, falling to 0.2%, from 0.6% in the preceding quarter, due to Brexit uncertainty and slowing global economy.
Post release of GDP data, the Pound Sterling tumbled against the greenback and the Euro, losing about 0.3% and 0.23%, respectively.
In the German market, Deutsche Post gained more than 2% on reports the company might be given a higher than anticipated increase in postage for letters.
Deutsche Bank, Wirecard, Infineon, Allianz, Lufthansa and Covestro also posted solid gains.
In France, Capgemini gained about 3%, Peugeot, Airbus Group, Atos and STMicroElectronics also advanced to higher levels, while Societe Generale was weak.
The Bank of France today predicted a 0.4% growth for the French economy in the first quarter of this year, which is slightly faster than the 0.3% expansion in the final quarter of 2018.
The Bank of France survey showed that the business confidence indicator for the manufacturing industry fell to 99 in January from 102 in December.
The confidence measure for the services sector eased to 100 from 101, while the index for construction remained unchanged at 105.
The survey noted that business leaders expect industrial production and services activity to pick up in February. The construction sector is also expected to continue growth, notes the report.
On the trade front, following the lower level talks, U.S. Treasury Secretary Steven Mnuchin and other U.S. officials are scheduled to be in Beijing later in the week to continue trade negotiations.
In Brexit news, responding to Jeremy Corbyn's letter that set out his demand for a Brexit deal, British Primer Minister Theresa May said she welcomed more talks with Labour on a Brexit agreement, especially on how alternate arrangements to the Irish backstop could work.
May wrote, "It is good to see that we agree that the UK should leave the European Union with a deal and that the urgent task at hand is to find a deal that honours our commitments to the people of Northern Ireland, can command support in Parliament and can be negotiated with the EU - not to seek an election or second referendum."
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