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Jan 29, 2019

European Markets Closing Report: Europe markets rally ahead of key Brexit vote; shares of Royal Mail tumble 10%

Sam Meredith

European stocks were higher Tuesday morning, as investors monitored global trade developments, fresh earnings reports and another potentially decisive Brexit vote.

European Markets: FTSE, GDAXI, FCHI, IBEX

FTSEFTSE 100FTSE6834.1487.041.29418640612
The pan-European Stoxx 600 index was up around 0.7 percent during mid-morning deals, with most sectors and major bourses in positive territory.
Europe’s utilities and personal and household goods were among the top performers, with each sector up more than 1 percent as investors flocked to stocks considered safe at times of economic uncertainty.
Looking at individual stocks, Germany’s SAP dipped into negative territory after the technology company released its latest earnings results. Europe’s most valuable tech firm said it would take restructuring charges of 800-950 million euros, mainly in the first quarter.
Meanwhile, Britain’s Royal Mail tumbled to the bottom of the European benchmark after it narrowed its profit view for the year. The London-listed firm saw shares plunge more than 10 percent on the news.
On the data front, Spain’s unemployment rate dropped to its lowest level in a decade during the final three months of 2018. Official data published Tuesday morning showed that more jobs in agriculture and construction helped the unemployment rate fall to 14.45 percent from 14.55 percent in the previous quarter.
Huawei charges
Market focus is largely attuned to global trade developments, after prospects for a long-awaited U.S.-China trade deal were dealt another setback. It comes after Washington leveled sweeping charges against Beijing’s telecom giant Huawei.
The U.S. Department of Justice filed criminal charges Monday against Meng Wanzhou, the chief financial officer of China tech giant Huawei and the daughter of its founder and president Ren Zhengfei.
The news comes shortly before Chinese Vice Premier Liu He is set to meet U.S. officials on Wednesday and Thursday. Market participants fear the jolt to Huawei could undermine the chances of the world’s two largest economies reaching a comprehensive trade deal.
Brexit vote
Back in Europe, British Prime Minister Theresa May will ask her Conservative lawmakers to send a message to Brussels that they would back her proposed Brexit deal if a plan to avoid a hard border with Ireland could be replaced.
On Tuesday evening, Westminster will once again have the chance to shape the future of the country’s exit from the European Union by debating and voting on what changes they want May to seek to her current withdrawal agreement.
The U.K. is expected to leave the bloc in exactly two months.

Source: CNBC

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