European shares add to gains as trade war fears fade into background

The German share price index, DAX board, is seen at the stock exchange in Frankfurt January 26, 2018. — Reuters pic
The German index, DAX board, is seen at the stock exchange in Frankfurt 26, 2018. — Reuters pic

LONDON, Sept 20 — extended their rally today as investors set aside fears over a US- trade war and focused instead on bullish macroeconomic and corporate news.

The pan-European STOXX 600 was up 0.3 per cent while the leading euro zone stock index was on track for its ninth straight session of gains, also up 0.3 per cent.

Autos, and mining sectors led gains as investors stayed resolutely focused on hopes that the latest escalation in the trade war would drive the dispute into endgame.

Autos gained 1.1 per cent, also helped by Kepler Cheuvreux upgrading its recommendation on the sector.

Tyre maker Continental and car parts supplier Valeo were top of the DAX and the CAC 40 respectively.

“On autos, valuations have reached historically low levels, pricing in a lot of bad news already,” wrote Kepler Cheurvreux strategists.

Shares in Belgian telecoms company Proximus climbed 3 per cent, with traders saying Citi had upgraded its recommendation on the stock.

Inmarsat shares rose 1.9 per cent after the British satellite company said it would collaborate with Japan’s Panasonic Avionics to provide in-flight broadband for commercial airlines.

Lower levels of market volatility, meanwhile, hurt quarterly revenue at trading platform IG Group, sending the stock down 8 per cent to the bottom of the STOXX.

Belgian biotech firm Argenx fell 4.2 per cent in a second day of losses after a share offering.

Markets have shrugged off an escalation on Tuesday of the tariff war between the United States and China, focusing rather on the tariff levels being lower than expected and on hopes that the dispute may be nearing an end.

“Financial markets are likely to focus on the potential for an agreement between US and officials that could reverse these tariffs,” wrote Goldman Sachs analysts.

An increase in US and German borrowing costs also left stock markets unscathed.

“For now stock markets appear to be largely indifferent to this gradual rise in borrowing costs,” said Michael Hewson, chief market analyst at CMC Markets.

Some put the move down to market technicals.

“As the market goes up, those long cash and downside protection have to chase it,” said a trader.

Investors have been raising their cash buffers, Bank of Merrill Lynch’s September fund manager survey showed on Tuesday.

On the small-cap front, German fashion retailer Tom Tailor issued a profit warning, sending its shares down 12 per cent. The firm blamed Europe’s exceptionally hot and long summer for slower growth. — Reuters

Source: The Malay Mail Online

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