Sun, Jan 19, 2020 - Page 14 News List

STOXX reaches record high on trade optimism


European shares on Friday clocked a record closing high after European Commissioner for Trade Phil Hogan struck a positive tone on talks with Washington and on optimism over signs of resilience in China’s economy.

The pan-European STOXX 600 on Friday rose 3.82 points, or 0.9 percent, to 424.36, its best week since Dec. 20 and a jump of 1.2 percent from a close of 419.14 on Jan. 10. At one point in trading, it reached a record high of 424.90.

Hogan on Thursday said that he had a good exchange of views with US Trade Representative Robert Lighthizer in Washington, underscoring Brussels’ desire to negotiate solutions for several open trade disputes between the US and the EU.

The meeting was a step forward in addressing long-standing issues such as a French digital tax and aircraft subsidies.

It also added to investor optimism after the US and China signed a trade deal earlier in the week.

“The positive comments surrounding one of the United States’ other trade conflicts — with the EU — it just adds to the overall feeling of relief,” said Connor Campbell, analyst at British financial spread better Spreadex.

Signs of improvement in the Chinese economy following an in-line GDP figure and strong industrial production data also aided risk appetite, with demand in the world’s second-largest economy looking to pick up this year.

“In recent months the Chinese authorities have been introducing measures to spur on economic activity, such as loosening lending restrictions, and the tactics appear to be working,” CMC Markets UK market analyst David Madden said in London.

The trade-sensitive miners subindex rose 2 percent, marking its best day since early last month, with BHP Group PLC, the world’s largest miner and a major Chinese supplier, adding 2.3 percent.

Stocks in Germany, the EU’s largest economy, rose 0.7 percent, with technology stocks serving as the biggest boost.

Germany, which has a largely export-reliant economy, stands to gain substantially from easing trade tensions.

Pharmaceuticals maker Bayer AG rose 0.7 percent after a mediator said that the company was close to settling more than 75,000 claims related to its Roundup herbicide.

Electricite de France SA jumped 9.8 percent to the top of STOXX 600 after the French government announced plans to introduce a “price corridor” for the wholesale nuclear power market that would help the state-controlled utility cover its costs while shielding consumers from price spikes.

Polish video game developer CD Projekt SA was the biggest loser on the STOXX 600, dropping 5.6 percent after it postponed the release of its widely awaited game Cyberpunk 2077.

Additional reporting by staff writer

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