Eu­ro­pean shares gain on trade talks

Irish Independent - Business Week - - FRONT PAGE -

EU­RO­PEAN shares rose yes­ter­day, driven by the ex­port-ori­ented au­tos and tech sec­tors as op­ti­mism grew that the United States and China could avoid a full­blown trade war that would fur­ther de­cel­er­ate a slow­ing global econ­omy.

The pan-Eu­ro­pean Stoxx 600 bench­mark broke a fresh three-week high, ris­ing 0.4pc close to the end of the ses­sion, while the UK’s Ftse-100 hit its high­est level in five weeks.

“My sce­nario is that of an eco­nomic slow­down, but I ex­pect things to get grad­u­ally bet­ter fol­low­ing a bru­tal 2018 dom­i­nated by tar­iffs and very harsh com­mer­cial rhetoric,” said Roberto Lot­tici, a fund man­ager at Italy’s Banca Ifigest.

Chi­nese and US teams ended trade talks in Bei­jing yes­ter­day, and of­fi­cials said de­tails will be re­leased soon.

A US trade del­e­ga­tion mem­ber said “it’s been a good one for us”.

Eu­ro­pean eq­ui­ties recorded their worst year in a decade in 2018, but so far this year they are up more than 3pc. A trade deal could turn in­vestors more up­beat over com­pany earn­ings as the fourth-quar­ter earn­ings sea­son gets un­der way.

Over­all, fourth-quar­ter earn­ings for Europe are ex­pected to have risen

7.1pc on rev­enues up 4.5pc, ac­cord­ing to Refini­tiv data.

In Ire­land, the Iseq Over­all In­dex climbed along­side bench­marks at other Eu­ro­pean bourses.

Near the end of trad­ing, it had risen 0.5pc to 5,711.

Shares in home­builder Abbey plunged more than 7pc to €13. That was de­spite UK peer Tay­lor Wim­pey say­ing that in­di­ca­tors for 2019 sales were solid, send­ing its shares more than 6pc higher. Abbey gen­er­ates most of its rev­enue and sales in the UK.

Shares in CRH, Ire­land’s biggest com­pany, had ad­vanced 1.6pc to €24.31, while Bank of Ire­land rose 1.5pc to €4.94 be­fore the close. The UK’s Ftse-100 was 0.6pc higher as the end of the ses­sion neared, while Ger­many’s Dax was also up 0.6pc. France’s CAC-40 was ahead 0.7pc.

An­a­lyst Chris Bai­ley at Ray­mond James said the “glass half-full in­ter­pre­ta­tion” of trad­ing up­dates from do­mes­ti­cal­ly­fo­cused UK busi­nesses “in­di­cates that in­vestors are be­com­ing a lit­tle less wor­ried about prob­lem­atic Brexit out­comes”.

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