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Europe midday: Shares hold onto early gains

By Alexander Bueso

Date: Tuesday 17 Apr 2018

Europe midday: Shares hold onto early gains

(ShareCast News) - Stocks are holding higher despite a wobble in Asian markets overnight, instead tracking gains overnight on Wall Street, amid a flurry of news on the M&A front and on the back of an upbeat update from US technology high-flyer Netflix.
Commenting on the market backdrop, Michael van Dulken at Accendo Markets said: "Calls for a positive open despite mixed Asian trading at odds with a positive start to the week on Wall St. After a calming of geopolitical concerns and optimism about the Q1 earnings season, mixed data from China may revive queries about the strength of the world's #2 economy (slowdown looming?) and Beijing's efforts to buoy growth whilst simultaneously tackling over-leverage (consumer and government) and inflated property prices."

Thus, as of 1158 BST, the benchmark Stoxx 600 was rising 0.38% or 1.44 points to 379.18, alongside a gain of 0.77% for Germany's Dax to 12,486.46 and an advance of 0.40% for the Cac-40 to 5,334.16.

According to the National Bureau of Statistics, China's gross domestic product expanded at a 6.8% clip year-on-year over the first three months of 2018, as expected by economists.

However, at up by 6.0% year-on-year, industrial production fell short of forecasts calling for an increase of 6.4%.

Also weighing on sentiment in Asia was 'market chatter' regarding Hong Kong's ability to maintain its peg with the US dollar.

Against that backdrop, and back in the Eurozone, the ZEW institute's economic confidence index for Germany retreated from a reading of +5.1 for March to -8.2 in April (consensus: -1.0) - its lowest level since November 2012.

Despite that weak reading, Jessica Hinds at Capital Economics said: "Admittedly, the hard data for Q1 so far have been particularly weak. But this in part reflects temporary effects related to the weather and a flu outbreak.

"And while Germany is vulnerable to increased protectionism, at this stage we doubt that an all-out trade war will materialise. Meanwhile, with the new grand coalition set to loosen fiscal policy slightly, we remain fairly optimistic about the outlook."

Earlier, ISTAT reported that Italy's harmonised consumer price index printed at up by 0.9% year-on-year in March, undershooting a preliminary estimate of 1.1%.

Pacing gains on the pan-European Stoxx 600 were shares of Intrum Justitia after the Swedish outfit tabled a €3.6bn bid for Intesa Sanpaolo's debt collection arm and its €10.8bn of bad debt.

In other M&A news, France's Sanofi disclosed it was in exclusive talks with Advent International to dispose of its Zentiva generic drug division for €1.9bn.

Still in the euro area's second-largest economy, grocer Casino Guichard posted a 3.1% jump in first quarter sales.


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