Aug 30, 2019

Europe I Europe Markets Closing Report: European stocks close higher on signs of trade war easing; Italy stock falls; Deutsche Wohnen up 10%

Chloe Taylor, Elliot Smith

European stocks rallied on Friday after China struck an accommodating tone over its trade war with the U.S., while British opposition lawmakers plan to trigger an emergency debate to prevent a no-deal Brexit.

European Markets: FTSE, GDAXI, FCHI, IBEX

FTSEFTSE 100FTSE7192.197.870.11378049305
The pan-European Stoxx 600 climbed 0.8% by the afternoon, with China-exposed basic resources stocks jumping 2.5% as all sectors traded in positive territory.
Bucking the trend, however, were Italian stocks, which fell on the back of new political developments in the country.
Luigi Di Maio, leader of Italy’s Five-Star Movement, said on Friday his party would only enter a coalition with opposition PD if it agreed to a string of policy demands, denting hopes that some political stability would soon be restored in Rome.
Italy’s FTSE MIB was more than 0.3% lower during afternoon deals, with Banco BPM slumping to the bottom of the Stoxx 600 on a 3% loss.
More broadly, stocks worldwide are experiencing a reprieve after the Chinese Ministry of Commerce on Thursday indicated that it would not escalate the trade war with Washington, urging negotiation and collaboration in pursuit of a “calm” resolution.
U.S. stocks were trading in positive territory on Friday as investors became more hopeful that a resolution to the Sino-U.S. conflict would soon be reached.
Back in Europe, investors continued to monitor the fallout from U.K. Prime Minister Boris Johnson’s suspension of parliament. The main opposition Labour party said on Thursday that it would trigger an emergency debate in parliament next week, in a bid to stop Johnson taking Britain out of the European Union without a withdrawal deal on October 31.
The no-deal scenario is widely opposed in the British parliament, and the elevated risk of it becoming reality has sent sterling lower.
In corporate news, Reuters reported on Thursday that French lender BNP Paribas plans to bid for Deutsche Bank’s equity derivatives book, with the intention of securing a deal within the next few weeks.
On the data front, French August CPI (consumer price index) inflation came in at 1.2% year-on-year, slightly softer than in July but in line with forecasts. Spanish retail sales rose by 3.2% in July from a year earlier after climbing by 2.5% in June.
U.K. consumer sentiment surveys revealed that confidence ebbed away from British businesses and consumers in August as the Brexit crisis metastasized, suggesting political turmoil is increasingly impacting the economy.

Stocks on the move

Deutsche Wohnen shares jumped 10.6% after a German newspaper reported that an incoming rent freeze in Berlin could be more lenient than previously planned.
Shares of Danish hospital equipment maker Ambu saw its shares rise 6% after a positive recommendation from the U.S. Food and Drug Administration (FDA).
At the other end of the Stoxx 600 was jewelry maker Pandora, which was trading 3% lower during the afternoon session. The Danish company recently announced it would undergo an extensive rebrand in a bid to boost sales.

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