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Tuesday 20th March 2018

European Stocks Claw Back Up After Four-Day Drop

Business

7Dnews London

Wed, 27 Mar 2019 10:19 GMT

European shares rose on Tuesday, March 26th, snapping a four-day losing streak, boosted by healthcare stocks and on indications that UK Prime Minister Theresa May's deal to exit the European Union could gain some support.

The pan-region STOXX 600 index added to early gains and rose 0.8%, led by Switzerland and Paris's near 1% jump, followed by Frankfurt's 0.6 % gain. Milan rose 0.4%, while London's FTSE closed 0.26% higher, as reported by Reuters. 

Dublin, considered a barometer of Brexit mood, bounced off a five-week low hit early in the session to end 0.2% higher after two Eurosceptic lawmakers indicated they might agree to support May's Brexit deal after parliament took control over the Brexit process for a day. 

Lawmakers will vote on a range of Brexit options on Wednesday, March 27th, giving parliament a chance to indicate whether it can agree on a deal with closer ties to Brussels before trying to push the government in that direction. 

Kallum Pickering, senior economist at Berenberg, said "Anything that can be perceived as lowering the 'hard Brexit' risk would reduce the probability of one the major downside risks to the global economic outlook."

Nearly three years after the 2016 EU membership referendum, and four days before Britain was supposed to leave the bloc, it remains unclear how, when or even if Brexit will take place, with parliament and the nation still bitterly divided.

Over the last four sessions, regional stocks had lost 2.6% driven by concerns about a softening global economy, uncertainty over Brexit and a possible US recession. 

Another note of caution on Tuesday came from a survey that showed German consumer morale deteriorated unexpectedly heading into April, suggesting household spending could weaken in the second quarter. 

German payments company Wirecard soared 26%, leading gains on the STOXX 600, after an investigation at the company's Singapore office found no material wrongdoing.

The healthcare index was the biggest gainer among STOXX 600 sectors, up 1.5% driven by gains in ConvaTec Group and Novartis.

ConvaTec rose nearly 6% after Swedish business daily Dagens Industri said several players are running the numbers on the UK medical device maker for a possible buyout after the stock's recent slump.

Airbus' 2% gain was among the biggest boosts to stocks in Paris, after the planemaker signed a deal worth tens of billions of dollars to sell 300 aircraft to China.

London's FTSE 100 was pulled higher by energy stocks as oil prices climbed, although a recovery in the pound put an upper limit on the FTSE's gains. 

Ocado rose 4% as the British online supermarket partnered with Australia's Coles Group - its fifth major overseas deal in less than 18 months. 

Meanwhile, Ferguson Plc was among the biggest weights among European stocks, falling 7.2% after the world's largest heating and plumbing equipment supplier said trading profit will likely be at the lower end of analyst expectations this year.

Carnival, the world's largest cruise operator, dropped 8.5% after it cut its annual profit forecast, expecting a hit from higher fuel prices and a strong dollar. 

Banks and auto stocks were the only laggards on the STOXX benchmark, down around 0.2% each. 


Europe