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Sep 19, 2018

European Markets at Close Report: Europe ends on a high note, as investors brush off trade dispute.


Alexandra Gibbs, Holly Ellyatt


European stocks ended Wednesday's session relatively upbeat, as investors shook off concerns surrounding escalating trade tensions between the U.S. and China.
The STOXX 600 index closed up 0.32 percent provisionally, with major sectors pointing in different directions by the end of trade. Basic resources was the top performer, while utilities dropped over 1 percent overall.
The U.K.'s FTSE 100 rose 0.41 percent at the close, while France's CAC 40 popped 0.57 percent and Germany's DAX saw gains of 0.52 percent. Most markets in peripheral Europe closed higher.
 
FTSE FTSE 7336.51 36.28 0.50% 500005948
DAX DAX 12220.70 63.03 0.52% 66688531
CAC CAC 5396.00 32.21 0.60% 52922457
IBEX 35 --- --- --- --- --- ---
Sentiment in Europe appears to be taking note from trading seen overseas, with U.S. stocks surging in early Wall Street trade and Asian markets finishing their session mostly in the black. While market focus has been largely attuned to a rift between the U.S. and China as of late, that's not the only story moving markets Wednesday.
Looking to Europe's sectors, basic resources was the best performing group, up almost 3 percent, lifted by a sharp rise in nickel and zinc prices. Among the sector's top performers are FTSE-listed mining stocks including Glencore, Antofagasta, Anglo American and BHP Billiton were all trading up over 3 percent or above.
Other groups that posted sharp gains included autos, banks and chemicals, which were all up over 1 percent each.
In the banking sphere, however, Danske Bank saw shares fell almost 4 percent after the Danish lender's CEO resigned following allegations that billions of euros were laundered through the bank's Estonian branch. In autos, Schaeffler jumped 3.2 percent after it reconfirmed its guidance for the financial year of 2018.
In individual stock news, Linde shares jumped almost 8 percent, after Reuters reported, citing a source, that the industrial gases firm was getting ready to sell extra assets to a consortium of Messer Group GmbH and CVC Capital Partners for around $200 million, moving it closer to U.S. antitrust approval for a planned merger with Praxair.
On the other end, Kingfisher sank over 6 percent, after the home improvement firm reported a 15 percent fall in half year profits. Adecco fell 6 percent after the staffing group indicated a slowdown in European hiring growth, in its latest strategic update.
Finally, the European Union has ruled that McDonald's did not receive selective tax treatment from the tiny European country of Luxembourg. The EU said the tax deal was not illegal but rather a result of a mismatch between US and Luxembourg tax laws.

Tit-for-tat trade war continues

On Monday, the U.S. administration announced that it would implement a 10 percent tariff on $200 billion worth of Chinese imports, which would increase to 25 percent by year-end. In response, China announced its own set of retaliatory tariffs, targeting over 5,000 U.S. products — worth about $60 billion, which would go into effect next week. The country has also filed a complaint to the World Trade Organization (WTO) against the U.S.
Meanwhile, President Trump appeared to leave the door open for negotiations with China, telling reporters during a visit with Poland's president that the U.S. may make a deal at some point with China and that his country is always open to talking.
Elsewhere, North Korean leader Kim Jong Un's meeting with South Korean President Moon Jae-in to discuss denuclearisation appears to have been successful. North Korea has agreed to "permanently" abolish its key missile facilities in the presence of foreign experts, and is willing to close its main nuclear complex if the United States takes reciprocal action South Korea's President Moon Jae-in said Wednesday, Reuters reported.
European leaders are heading to Austria on Wednesday, ahead of an informal summit at which immigration and Brexit are expected to be the main subjects of discussion. European Council President Donald Tusk said Wednesday that he would call an extra Brexit summit around mid-November to finalize an agreement with the U.K., according to Reuters. In his speech, Tusk added that there is "perhaps more hope" now, but added that there is "surely less and less time."
British inflation hit a six-month high in August, boosted by larger-than-usual seasonal increases in transport fares and higher theater admission prices, data by the Office for National Statistics showed.