EUROPE MARKETS: European Markets Buoyed By Lifting Of Huawei Ban, Trade Talks
July 01 2019 - 7:26AM
Dow Jones News
By Dave Morris
European markets rallied Monday on the perceived lightening of
trade skirmishes among the U.S. and China, with tech stocks among
the best performers.
How did markets perform?
The Stoxx 600 rallied to 388.1, up nearly 0.9%. It increased
0.7% Friday.
The U.K.'s FTSE 100 jumped 1.1% to 7,509.9, after rising 0.3%
Friday.
The pound fell 0.4% to $1.2646, giving back Friday's 0.4% gain
almost exactly.
In Germany, the DAX climbed 1.3% to 12,558.4. It advanced 1%
Friday.
France's CAC 40 grew 0.8% to 5,582.1, after moving up 0.8%
Friday.
Italy's FTSE MIB edged up 0.3% to 21,291.6. On Friday it swelled
0.6%.
What's moving the markets?
Weekend reports from the G-20 summit in Osaka, Japan that U.S.
President Donald Trump and Chinese President Xi Jinping had agreed
to restart trade negotiations
(https://www.wsj.com/articles/trump-says-he-is-set-to-discuss-huawei-with-xi-11561769726?mod=hp_lead_pos1)
put investors in a bullish mood Monday. The relief rally lifted
European indexes, though they have retreated somewhat from their
highs.
"The two most positive things from the weekend were that
President Trump won't put the additional tariffs on China for the
'time being' and that he softened his stance on Huawei. He will
allow U.S. companies to sell some equipment to Huawei, as long as
it was 'no great national security problem'," Deutsche Bank
strategist Jim Reid told clients in a note.
Judging by fresh economic data, China's manufacturing sector
could use a break from trade tensions. The Markit/Caixin Purchasing
Managers' Index (PMI) survey showed manufacturing in June was still
contracting, coming in at 49.4 versus a flat reading of 50
predicted.
The Eurozone's Markit PMI manufacturing survey also came in
lower than expected in June, at 47.6 versus a consensus prediction
of 47.8. Germany was not immune; its Markit PMI manufacturing
(Final) PMI for June showed 45 versus 45.4 predicted.
Which stocks are active?
The announcement that the U.S. would remove some sanctions from
Chinese electronics company Huawei fueled relief for chip makers.
STMicroelectronics NV (STM.FR) shot up 6%, AMS AG (AMS.EB) popped
4.5% and Infineon Technologies AG (IFX.XE) climbed 4%.
British Airways parent International Consolidated Airlines Group
PLC (IAG.LN) was caught in the jetwash after a downgrade from
Bernstein analysts, while Deutsche Lufthansa cut it (LHA.XE) from
buy to market perform. The analysts cited the risk that, as leisure
travel slows in Europe, corporate travel could follow suit. IAG
shares shrank 1.3% while Deutsche Lufthansa moved down 0.6%.
Burberry Group PLC (BRBY.LN) was upgraded to neutral from sell
by Goldman Sachs, which said weakness in the U.K. currency could
prove to be a significant boost. Burberry also boasts an attractive
price to earnings radio, the analysts wrote. Shares rose 3%.
(END) Dow Jones Newswires
July 01, 2019 07:11 ET (11:11 GMT)
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