EUROPE MARKETS: Hopes For Trade Pact Buoy European Stocks As Publicis And Hugo Boss Hit By Warnings
October 11 2019 - 06:29AM
Dow Jones News
By Steve Goldstein, MarketWatch
Hopes for progress in trade talks between the U.S. and China as
well as the U.K. and the European Union's Brexit negotiations gave
a lift to European stocks on Friday.
Up 14% this year, the Stoxx Europe 600 climbed 1.12% to
387.05.
The German DAX leaped 1.69% to 12369.19, the French CAC 40
surged 1.09% to 5629.60, while the U.K. FTSE 100 fell 0.05% to
7182.60.
The Dow Jones Industrial Average rose 150 points on Thursday and
futures were higher Friday morning, as President Donald Trump
announced he would be meeting China's Vice Premier Liu He, a
gathering interpreted as progress. The Wall Street Journal reported
that terms for a possible tentative deal could include China
offering more agriculture purchases, a joint pact to deter Beijing
from devaluing its currency, and, on the U.S. side, suspending
planned tariffs and relaxing export bans against blacklisted
Chinese telecom giant Huawei Technologies Co.
U.K. banks Lloyds Banking Group (LLOY.LN) and the Royal Bank of
Scotland (RBS.LN) each rose over 5% on hopes for a less-disruptive
Brexit, as U.K. Prime Minister Boris Johnson and Irish leader Leo
Varadkar said they had spotted a "pathway" to an agreed deal
between the U.K. and Europe. The Times reported Johnson made a
"substantial" offer on customs checks regarding Northern
Ireland.
The British pound , which surged on Thursday to post the biggest
one-day rise since March, extended gains. European Council
President Donald Tusk tweeted that Varadkar conveyed "promising
signals."
Oil producers Total (FP.FR) and Royal Dutch Shell (RDSA.LN) rose
as Iran reported the explosion of a tanker, which helped to lift
crude-oil futures
(http://www.marketwatch.com/story/oil-prices-jump-after-reports-of-iranian-tanker-blast-2019-10-11)
.
Of stocks in the spotlight, shares of Publicis Groupe (PUB.FR)
plunged 14% as the French advertising group said organic sales fell
2.7% during the third quarter, worse than consensus forecasts which
were around flat. The full-year organic revenue growth forecast for
a 2.5% drop also was worse than consensus expectations.
Rival WPP (WPP.LN) also lost ground, falling 4.4%. Analysts at
Liberum said many of the problems at Publicis are firm specific,
and only Publicis' issues with digital media apply to the U.K.
firm.
Hugo Boss (BOSS.XE) shares plunged 13.4% as the clothing maker
said the market environment in North America deteriorated, and
business in Hong Kong has been "substantially negatively affected"
since the beginning of the political unrest and demonstrations.
Volker Bosse, an analyst at Baader Helvea Equity Research, said
the company is suffering from the trend toward casualization, its
late start into digital distribution channels, less tourists from
Asia visiting North America, a strong dollar and the devaluation of
the British pound.
SAP (SAP.XE) rallied 7.7% as the company said Bill McDermott
will be stepping down as CEO and that board members Jennifer Morgan
and Christian Klein will replace him. The software firm also
reported a 20% rise in adjusted operating profit for the third
quarter and a 38% jump in new cloud bookings.
"We consider the achievement of solid Q3 2019 results will be
appreciated short-term, in an increasingly shaky economic
environment ('trade war', Brexit, etc.)," said Gregory Ramirez, an
analyst at Bryan, Garnier & Co. The analyst said McDermott's
decision to step down is a surprise. However, he said his departure
was prepared several months ago, and noted that SAP is used to
co-CEO structures.
Renault shares (RNO.FR) rose 4.2% as the company ousted its CEO
(http://www.marketwatch.com/story/renault-ousts-ceo-who-replaced-jailed-former-head-ghosn-2019-10-11),
Thierry Bollore, as the automaker searches for a replacement.
Bollore had replaced the now-jailed Carlos Ghosn. Renault's partner
Nissan had named a new CEO earlier in the week.
(END) Dow Jones Newswires
October 11, 2019 06:14 ET (10:14 GMT)
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