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Europe close: Stocks boosted by US data, trade news

By Alexander Bueso

Date: Thursday 16 Jan 2020

Europe close: Stocks boosted by US data, trade news

(Sharecast News) - A string of better-than-expected US economic data sent stocks across almost the entire Continent higher despite some analysts' qualms regarding the US-China trade deal signed the night before and ongoing geopolitical worries.
"US markets continue to outperform their European counterparts today, as the dust settles on a somewhat lopsided US-China trade deal," said IG's Josh Mahony.

Nonetheless, there were also some analysts breathing a sigh of relief that news of the trade accord wasn't met by a wave of profit-taking.

Reports on US weekly jobless claims, monthly retail sales and manufacturing sector conditions in the mid-Atlantic region all comfortably exceeded forecasts.

Against that backdrop, the benchmark pan-European Stoxx 600 finished 0.22% higher to 420.54, albeit alongside a dip of 0.02% to 13,429.43 for Germany's Dax, possibly due to concerns of brewing trade tensions with Washington.

The FTSE Mibtel on the other hand gained 0.74% to 23,940.41 while the Ibex 35 put on 0.64% to 9,572.5.

Overnight, Washington and Beijing signed a deal that would see China expand its purchases of US goods by $200.0bn over the next two years, although some market participants were reportedly waiting for evidence that the agreement was really being implemented.

Be that as it may, Wall Street's main market gauges were all setting fresh record highs in the background, with the news of the free trade agreement between Canada, Mexico and America in the US Senate providing another favourable tailwind for stocks around the globe.

Markets were also keeping a wary eye on the headlines from the Middle East. Citing the Washington Post, Reuters reported that the White House had threatened a 25.0% tariff on European car imports if Britain, France and Germany did not formally accuse Iran of breaking the 2015 JCPOA nuclear deal.

Linked to the above, Autos and Parts were the weakest link in the chain on Thursday, with the Stoxx 600's sub-index for the sector retreating 0.90%.

But it was shares of Pearson which led to the downside on the pan-European gauge following the education publisher's latest trading update

Shares of Geberit were another top faller in the wake of news that the Swiss plumbing supplies outfit had posted 1.9% increase in organic sale in its fourth quarter, with reported revenues of 702m Swiss francs missing analysts' forecasts.

Oilfield services group John Wood was the second best performer, alongside gains for Tullow Oil as well as for biotechs Evotec SE and Swedish Orphan Bioviotrum AB.

NMC Health was also near the top of the leaderboard amid news of insider buying by Patrick James Meade.

Berlin-based Hello Fresh also gained, after guiding higher on Wednesday night for both revenues and margins on an earnings before interest, taxes, depreciation and amortisation basis.

Shares of Storebrand were also on the up after private equity outfit EQT, which was controlled by the Wallenberg family, announced that it had taken a 2.5% stake in the firm.

Ericsson advanced after analysts at Barclays told clients that the telecoms equipment maker was "unloved" but well-positioned for 2020, reason why they upgraded their recommendation on its shares to 'overweight'.

Analysts at UBS on the other hand could be heard expressing a preference for Nokia over Ericsson.

In economic news, ACEA announced that car sales in the European Union jumped by 21.7% in December as buyers in France, Sweden and the Netherlands tried to get ahead of tax increases that were set to kick-in on 1 January - but market commentary said such growth might prove short-lived.


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