European shares in tentative New Year’s Eve rise after bruising 2018

The German share price index, DAX board, is seen at the stock exchange in Frankfurt October 30, 2017. — Reuters pic
The German index, DAX board, is seen at the stock exchange in Frankfurt October 30, 2017. — Reuters pic

LONDON, Dec 31 — closed slightly higher today as soothing comments from Washington and Beijing about trade frictions between the world’s top two provided some comfort for investors as a bruising year in drew to a close.

In a shortened session before New Year’s Eve celebrations, the STOXX 600 was up 0.5 per cent, continuing to claw back from multi-year losses hit on Thursday.

France’s CAC 40 was up 1.1 per cent, Spain’s IBEX was up 0.5 per cent while Britain’s FTSE 100 was dragged lower by a stronger pound.

Volumes were thin with German and Milan bourses shut and many investors still away for the Christmas holidays.

Market mood brightened slightly after US President Donald Trump said he held a “very good call” with ’s President Xi Jinping on Saturday to discuss trade and claimed “big progress” was being made.

state media were more reserved, saying Xi hoped the negotiating teams could meet each other half way and reach an agreement that was mutually beneficial.

Still, investors headed into 2019 licking their wounds after a torrid past year amid lingering worries about slowing growth, trade frictions, expectations of more US interest rate increases and the UK’s divorce from the European Union.

The pan European STOXX 600 had its worst year since Lehman Brothers imploded in 2008, while euro zone stocks put in their worst performance since 2011.

One major issue that has plagued markets this year — Italy’s budget crisis — was put to rest for now as Rome passed the 2019 budget just before a year-end deadline, averting a major showdown with Brussels.

Highlighting potential headaches for investors in 2019, data on Monday showed China’s activity contracted for the first time in over two years in December, as the world’s second-largest economy lost further momentum.

“Mixed Chinese PMI surveys have done little to help the growth story as (Chinese) stocks close out the year as the biggest losers,” said Josh Mahoney, market analyst at IG.

“Meanwhile, improving tones from both the US and China on trade talks helped improve sentiment ahead of the new year.”

Auto and luxury goods stocks, which are vulnerable to rising protectionism and Washington’s row with Beijing, benefited the most from the conciliatory noises over the weekend. China is the biggest market for high-end retailers.

Valeo topped France’s CAC 40, rising 3.9 per cent, Michelin was up 2.5 per cent and Peugeot gained 2.1 per cent.

Gucci owner Kering and LVMH all rose between 2.2 and 4 per cent.

The mining and resources sector was another gainer, up 0.6 per cent, buoyed by stronger copper prices even as most industrial metals headed for losses in 2018. The sector dropped almost 18 per cent this year.

In individual moves, APRIL surged to its highest since May 2011 after private equity firm CVC Capital Partners said it was in exclusive talks with French peer Evolem to buy its majority stake in the French insurer. — Reuters —

Source: The Malay Mail Online

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