Sun, Apr 15, 2018 - Page 14 News List

Investors cash out on European equities amid global uncertainty on Syria crisis

AFP and Reuters, NEW YORK and LONDON

European stocks on Friday ran into profit-taking as many investors, wary of global uncertainty and US President Donald Trump’s volatile Twitter diplomacy, cashed out before the weekend, traders said.

Bourses in Paris and Frankfurt had posted solid gains earlier in the session after Trump put off a decision about military strikes in Syria, giving investor nerves a welcome break.

Although tensions appeared to be easing, few dared to carry positions into the weekend, fearing they might regret it come tomorrow morning. Equity markets in Europe finished with modest gains.

The pan-European STOXX 600 on Friday rose 0.38 points, or 0.1 percent, to 379.20, an increase of 1.2 percent from 374.82 on April 6.

“Traders remain cautious heading into the weekend,” Oanda Corp senior market analyst Craig Erlam said. “Given the backdrop of a trade conflict with China and rising tensions with Russia over Syria, any rallies may be somewhat gradual.”

Despite the lackluster ending to the week, European markets “have pulled off a third straight week of gains,” LCG’s Jasper Lawler said, crediting “Trump Twitter fatigue” for the overall resilience of equity markets.

A plunge in software firm Sage Group PLC’s shares put pressure on Britain’s top share index, while a rising pound weighed on big overseas earners.

The FTSE 100 closed up 6.22 points, or 0.1 percent, at 7,264.56, posting a weekly gain of 1 percent for the third time in a row, its best winning streak since early January, as the focus turns to the upcoming first-quarter earnings season.

Shares in Sage were down 8.1 percent, recouping some earlier losses, after the company cut its full-year revenue growth forecast after software subscription growth slowed in the first half.

“It’s not great to hear as you move into earnings season, and tech is a key sector. It’s one that created an element of volatility recently and it is the future,” Accendo Markets head of research at Mike van Dulken said.

“Perhaps [there is] an element of [Sage] being penalized because it’s one of the first few to come out with results, secondly because it’s the tech sector and everyone’s hungry to know that tech is doing OK,” Van Dulken added, pointing to a big fall in peer Micro Focus International PLC last month after a profit warning.

Micro Focus was one of the biggest FTSE gainers on Friday, up 3.2 percent, extending Thursday’s gains following a report that hedge fund Elliott Management Corp had taken a stake in the British software firm.

A stronger pound was another drag on the FTSE, hitting shares in companies that earn a big chunk of their earnings overseas, such as British American Tobacco PLC.

Additional reporting by staff writer

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