Sun, Jan 13, 2019 - Page 14 News List

European shares gain in first trading week of year

SAFETY MEASURE:A lack of details on this week’s US-China trade talks encouraged some dealers to trim their positions ahead of the weekend, an analyst said

Reuters, LONDON

European shares closed higher on Friday after hitting one-month highs as investor appetite for assets considered risky remained firm, despite caution over trade and ahead of earnings season.

The pan-European STOXX 600 ended 0.1 percent higher on its fourth straight day in the black — its longest winning streak since November.

However, Frankfurt, Paris and London all ended in negative territory as enthusiasm over China’s trade talks with the US waned without hard evidence about what was agreed.

Worries about slowing economic growth in China also lingered, while Wall Street’s gains from a rally on Thursday faltered as corporate results season starts in earnest next week.

“The lack of additional detail in relation to the update [on US-China trade talks] has encouraged some dealers to trim their positions ahead of the weekend,” said David Madden, market analyst at CMC Markets UK.

China-sensitive autos and parts suppliers led the falls, down 1 percent.

Valeo Group dropped 6.4 percent, the biggest faller on France’s CAC 40, while Continental AG and Volkswagen AG were among the biggest DAX decliners.

Still in the first full trading week of this year, the STOXX 600 gained 1.7 percent as investors regained their appetite for risk boosted by dovish comments from US Federal Reserve Chairman Jerome Powell.

Equity funds drew inflows of US$6.2 billion, the biggest in 11 weeks, Bank of America Merrill Lynch said.

Britain’s FTSE 100 erased earlier gains as sterling bounced amid growing expectations that the government might delay its departure from the EU beyond March 29.

Focus remained on British Prime Minister Theresa May’s efforts to get her Brexit deal through parliament, with a crucial vote due on Tuesday.

A drastic about-turn in crude prices also weighed on heavyweight oil stocks.

In the healthcare sector, downgrades by Jefferies Group LLC hit UDG Healthcare PLC and Orion Oyj, which were the worst individual performers with falls of 7.7 percent 7.4 percent respectively.

French utilities took a hit after Societe Generale SA downgraded ratings on Suez SA and Veolia Environnement SA, citing doubts about the global growth outlook. The stocks were down 2.8 percent and 2.6 percent respectively.

The UK’s housebuilders were stand-out gainers on the day after Bank of America Merrill Lynch upgraded its view on the sector, saying “it seems at least possible, or even probably, that some sort of Brexit resolution is within sight and therefore the UK housebuilding sector may see some relief.”

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