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Europe close: Shares defy tariff anxiety to finish in the green

By Josh White

Date: Friday 10 May 2019

Europe close: Shares defy tariff anxiety to finish in the green

(Sharecast News) - European shares finished in the green on Friday, continuing to defy expectations of another day in the red after the US more than doubled tariffs on $200bn (£153bn) worth of Chinese goods.
After closing lower on Thursday on the back of concerns that the US-China trade talks were faltering as President Donald Trump said "China broke the deal", the pan-European Stoxx 600 index kept its head above the waterline.

All major bourses on the continent were higher as investors had factored in the trade spat impact a day earlier and traders took some heart from the fact that talks in Washington were continuing.

The Stoxx 600 finished up 0.42% at 377.49, with Frankfurt's DAX ahead 0.85% at 12,075.35 and the CAC 40 in Paris adding 0.41% to 5,334.93.

In Madrid, the IBEX 35 was 0.39% firmer at 9,131.10, while Milan's FTSE MIB was in the green by 0.28% at 20,874.78.

Closer to home, the FTSE 100 ended its session down 0.057% at 7,203.29, while the FTSE 250 was up 0.42% at 19,366.80.

China on Friday said it "deeply regrets" the US move, adding that it would take necessary countermeasures.

"Trump's trade war is rumbling on yet again, with hopes of a quick solution being dashed amid his claim that there is 'no need to rush' US-China talks," said IG senior market analyst Joshua Mahoney.

London Capital Group analyst Jasper Lawler added that the markets today were not seeing the same risk-off reaction that they had in previous sessions.

"The fact that the two sides have agreed to continue negotiations on Friday is offering a glimmer of hope that the relationship between the two powers hasn't deteriorated beyond repair," he explained.

"Markets are also clinging to Trump's comments over a 'beautiful letter' from Chinese President Jinping Xi and an expected phone conversation between the two leaders."

ING said it was expecting China to retaliate with $30bn worth of tariffs on US goods.

"This could happen either today or tomorrow ... but it will become increasingly difficult for China to respond to a further round of tariff hikes," it said.

In economic news, German exports rose unexpectedly in March, despite the fact that the country has been hit disproportionately by trade protectionism due to its open economy.

The data raised hopes that the country's first quarter growth would not be harmed significantly.

According to the German Federal Statistics Office, seasonally adjusted exports rose by 1.5% month on month while imports were up 0.4%.

The country's trade surplus moved up to €20bn from €18.7bn a month earlier.

Earlier in the week, the European Commission slashed its German GDP growth forecasts to 0.5% for 2019, in line with the German government's own prediction.

In corporate news, Thyssenkrupp shares surged 28.71% after the company said it was considering a stock market listing for its lucrative elevators business after abandoning a plan to split the company in two.

"The economic downturn and its effects on business development and the current capital market environment have led to the separation not being able to be realized as planned," the firm said in a statement.

It added that it could not resolve antitrust issues raised by the European Commission over its steel joint venture with Tata Steel, and expected the deal to be blocked.

The German industrial giant also said it expected a net loss for the year, with adjusted earnings before interest and tax, including the steel division, to fall between €1.1bn and €1.2bn.

Danske Bank shares were ahead 3.22% after the company said it had appointed Chris Vogelzang as chief executive.

The bank remained under investigation over its involvement in a massive money laundering scandal.

Vogelzang will take over from Jesper Nielsen, the interim chief appointed last October after the resignation of Thomas Borgen.

British Airways and Iberia parent International Consolidated Airlines was in the green by 1.9% in London, even as it said that profit more than halved in the first quarter as it was buffeted by rising fuel costs and stiff competition.

Operating profit in the three months to the end of March dropped 60% to €135m, while total revenue increased 5.9% to €5.32bn and passenger revenue per available seat fell 0.8% to 6.16 cents.

Danish medical equipment marketer Ambu was a heavy faller throughout the session, losing 20.41% after the resignation of company chief executive Lars Marcher.

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