EUROPE MARKETS: European Markets Rally On Trade Hopes And Signs Of Brexit Delay
September 05 2019 - 7:16AM
Dow Jones News
By Mark Cobley
European markets mostly rose on Thursday morning, following
gains across most of Asia and on Wall Street yesterday, after China
said trade talks with the U.S. will resume in October
(http://www.marketwatch.com/story/china-says-trade-talks-with-us-to-take-place-in-october-2019-09-05).
The Stoxx Europe 600 index rose 0.6% after China's commerce
ministry said in a statement that vice-premier Liu He had spoken
with U.S. trade representative Robert Lighthizer and Treasury
Secretary Steven Mnuchin, and agreed on further negotiations to try
to conclude a trade dispute that has rattled global markets for
months.
Germany's benchmark DAX index gained 0.9%, despite news that
German manufacturing orders had slumped in July by more than
expected
(http://www.marketwatch.com/story/german-manufacturing-orders-slump-in-july-2019-09-05).
France's CAC 40 also rose 0.9%.
The U.K.'s FTSE 100 was the only European market to decline
(http://www.marketwatch.com/story/london-market-drops-as-uk-government-teeters-2019-09-05),
falling by 0.7% as the country's political turmoil deepened. Prime
Minister Boris Johnson lost a series of crunch parliamentary votes
on Tuesday and Wednesday
(http://www.marketwatch.com/story/boris-johnsons-brexit-plans-stymied-again-parliament-rejects-call-for-election-2019-09-04),
paving the way for an election in the coming weeks or months that
may determine the fate of Brexit.
But the British pound rallied by 0.6% on investors' hopes that
setbacks for the strongly pro-Brexit Johnson mean that the chances
of a disorderly and rapid EU exit for the U.K. have diminished.
Among individual stocks, U.K. regional banking group CYBG PLC
(CYBG.LN) was the worst decliner in Europe, as its shares plunged
21% after it reported a larger-than-expected bill of GBP300 million
to GBP450 million ($500 million) from penalties tied to the past
mis-selling of payment protection insurance, a widespread banking
scandal in the U.K. Analysts at Jefferies said that the credibility
of the bank's management "is challenged on PPI, and investors are
likely to avoid this share until results on November 28".
Norwegian energy group Equinor (EQNR.OS) was the region's top
gainer, with shares climbing 8% after it announced a $5 billion
stock buyback program. Shares in French aerospace group Dassault
Aviation (AM.FR) rose by 7.9% after it reported strong results, and
U.K.-listed engineering investment company Melrose Industries
(MRO.LN) gained 6.7% after its losses halved, indicating a
turnaround plan is working.
(END) Dow Jones Newswires
September 05, 2019 07:01 ET (11:01 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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