Europe Markets: European stocks rebound as investors dismiss China virus fears

0
109


European stocks rebounded sharply on Friday as the World Health Organization eased fears over the coronavirus crisis in China.

The Stoxx 600

SXXP,+0.84%

 climbed 1.2% in early trading, while the German DAX

DAX,+0.90%

 and the French CAC

PX1,+1.07%

 rose 1.3%, after both fell Thursday amid concerns over the spreading virus. The FTSE 100

UKX,+0.93%

  jumped 1.6%.

What’s moving the markets?

The continent’s major indexes rebounded on Friday despite the coronavirus death toll rising to 26. The World Health Organization’s decision not to declare the outbreak a public health emergency appears to have improved sentiment among investors. China has also imposed travel restrictions on a ninth city in a bid to contain the virus.

European stocks slipped on Thursday over the coronavirus crisis and as investors moved away from riskier assets. U.S. President Donald Trump added to the negative sentiment by threatening “very high tariffs” in a trade deal with the European Union.

Aside from the improved sentiment regarding the coronavirus, economic data provided a further boost to stocks.

Germany’s purchasing managers’ index (PMI) data suggested the country’s economy, which recorded its weakest growth last year since 2013, had picked up at the beginning of 2020.

The manufacturing and services sectors both beat expectations, with the composite PMI rising to 51.1 in January from 50.2 in December.

“A number of positive takeaways from January’s flash PMI survey suggest the storm clouds over the German economy may be starting to clear,” said Phil Smith, principal economist at IHS Markit, which compiles the data.

The Eurozone PMI survey revealed a slow start to the year for the bloc’s economy, with growth ticking along at the same pace as in December. Manufacturing PMI moved to five-month highs and closer to stabilizing, but the sector contracted for a 12th consecutive month. The U.K. economy returned to growth as its composite PMI climbed to 52.4, up from 49.3 in December.

Which stocks are active?

Shares in Ericsson

ERIC.B,-0.05%

  slumped 8% as the telecommunications equipment company’s fourth quarter earnings were hit by higher 5G costs and a weaker U.S. market. It said costs, from investing in acquisitions digitization, security and ethics and compliance, would continue to rise this year but wouldn’t endanger financial targets for 2020 or 2022.

British pub chain Marston’s

MARS,-0.37%

  slid 8% after warning the U.K.’s national minimum wage hike, taking effect in April, would have a greater-than-expected impact on the business.

Just Eat

JE,+1.94%

  fell 2.7% as the U.K.’s competition watchdog said it was investigating the online food delivery company’s proposed merger with Takeaway.com

TKWY,+1.67%

  . The Dutch meal delivery company’s shares dropped 2%.

Read More

LEAVE A REPLY

Please enter your comment!
Please enter your name here