Sun, Dec 23, 2018 - Page 14 News List

European stocks rally to edge up as US rout slows

AFP and Reuters, LONDON

European stocks on Friday managed a late recovery to close steady, helped by an attempt in US markets to recover some of the previous day’s sharp losses.

However, political turbulence in Washington, renewed fears over US-China relations and economic growth strains weighed on markets, with oil prices testing lows not seen since summer last year.

“It has been a remarkably terrible trading week for financial markets amid concerns over rising US interest rates, decelerating global growth, Brexit uncertainty and chaos in Washington,” ForexTime research analyst Lukman Otunuga said.

Meanwhile, US data showed that Trump’s multifront trade wars are dragging down growth.

“The global rally in stocks seen in the past couple of years is now well and truly over,” X-Trade Brokers chief market analyst David Cheetham said, adding that London’s FTSE was seeing its worst December since 2002.

“But the question going forward is whether this is the start of a bear market or simply a pause and period of consolidation,” he said.

The FTSE 100 on Friday gained 9.24 points, or 0.1 percent, to 6,721.17, falling 1.8 percent from a close of 6,845.17 on Dec. 14, as the market wrapped up this year’s final full week of trading.

Wall Street lifted the mood, rising in volatile early trade after heavy losses on the chances of a partial US government shutdown and of further interest rate increases by the US Federal Reserve.

That guided a 0.6 percent gain in HSBC Holdings PLC, which has a larger international presence, making it the top boost to the FTSE 100.

The blue-chip index outperformed its European peers due to its exposure to the mining sector.

Anglo American PLC climbed 2.8 percent, while Rio Tinto PLC, BHP Group PLC and Antofagasta PLC between 1.4 percent and 1.6 percent on higher copper prices.

UK indices were still on track for their worst quarter since 2011, when Europe was battling a sovereign debt crisis, and their worst year since 2008 amid growing worries about slower global growth, Brexit and rising US borrowing costs.

Vodafone Group PLC dropped 2 percent and was among the biggest drags on the main index after a tender offer to replace PricewaterhouseCoopers as its auditor.

However, investors developed an appetite for Just Eat PLC, which rose 3 percent after rival NV struck a 930 million euro (US$1.06 billion) deal to buy larger rival Delivery Hero SE’s operations in Germany.

The British takeaway group was urged to sell assets by a shareholder earlier this week and analysts have since said that the calls raised the possibility of a takeover or a go-private deal.

Royal Mail shares gained 1.5 percent before the firm leaves the blue-chip index as part of reweightings tomorrow.

Still, surveys showed that British consumers are at their gloomiest in more than five years, with business sentiment at its weakest since the 2016 vote to leave the EU.

“I think the main sentiment is going to come after the New Year when we start having retailers’ trading statements coming through,” Cavendish Asset Management fund manager Paul Mumford said.

Germany’s DAX on Friday rose 22.72, or 0.2 percent, to 10,633.82, shedding 2.1 percent from a close of 10,865.77 on Dec. 14.

In Paris, the CAC 40 on Friday was mostly unchanged, edging up 1.93 points to 4,694.38, a drop of 3.3 percent from 4,853.70 a week earlier.

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