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Europe close: Stocks trade up, buoyed by company results and positive vaccine headlines

By Alexander Bueso

Date: Tuesday 15 Sep 2020

Europe close: Stocks trade up, buoyed by company results and positive vaccine headlines

(Sharecast News) - European stocks clocked in with slight gains buoyed by advances among retailers after Sweden's Hennes&Mauritz blew past analysts' forecasts and helped by an upbeat reading on economic confidence out of Germany.

As well, overnight, US drug giant Pfizer's chief executive officer, Albert Bourla, told CNBC that its Covid-19 vaccine candidate might be good to go before the end of 2020 "if found to be safe and effective".

A raft of better than expected economic data out of the People's Republic of China added to the positive tone, boosting Basic Resources names.

"European markets started to gain traction this morning immediately after the latest German ZEW expectations survey unexpectedly posted a big jump in September, moving up from 71.5 to 77.5," said CMC Markets UK's David Madden.

"This surprise shift appears to have prompted a fresh bout of optimism."

The pan-European STOXX 600 index was up 0.66% at 370.96, alongside a 0.18% rise for the German Dax to 13,217.67, while the Spanish Ibex 35 climbed 1.22% to 7,036.0.

Pacing gains at the sector level were Retail (2.33%), Healthcare (1.54%) and Basic Resources (1.66%).

H&M reported better-than-expected preliminary third quarter pre-tax profit of SEK2bn, having recovered quickly from the coronavirus hit to sales.

Ocado shares jumped after the company reported a 52% surge in third quarter revenue as its retail unit joint venture switched to Marks & Spencer from Waitrose. M&S shares were also higher on the news.

Fiat Chrysler shares were also higher alongside stock in Peugeot after the two car manufacturers restructured the terms of their planned merger to save cash with Fiat Chrysler shareholders receiving a smaller dividend.

The two companies, which are set to merge into Stellantis, the world's fourth-largest carmaker, said in a joint statement late on Monday that FCA would cut the cash element of a €5.5bn special dividend to €2.9bn.

Peugeot said it would in turn postpone the planned spinoff of its 46% stake in parts maker Faurecia until after the merger and extend it to all shareholders of the new group. Faurecia shares slumped by more than 7% on the news.

William Hill shares surged after the bookmaker said a multi-year deal between its US partner Caesars Entertainment and broadcaster ESPN will feature its sports betting apps and sports book odds. Flutter Entertainment and GVC were also trading up.


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