EUROPE MARKETS: European Stocks Climb As China Cools Trade Tensions And Italy Solves Political Crisis
August 29 2019 - 6:36AM
Dow Jones News
By Callum Keown
European stocks climbed on Thursday as China eased trade war
tensions and raised hopes of a calm resolution.
The Stoxx 600 and the FTSE 100 both rose 1%, while the German
DAX lifted 1.1% on a strong morning for stocks.
Italy's FTSE MIB led the risers, climbing 1.9% after President
Sergio Mattarella gave Prime Minister Giuseppe Conte a mandate to
form a new government.
What's moving the markets?
China Commerce Ministry spokesman Gao Feng cooled trade-war
tensions on Thursday by saying the country would not immediately
respond to the latest tariffs imposed on it by the U.S.
He added that China remained in contact with Washington and that
discussions should move toward removing tariffs
(http://www.marketwatch.com/story/us-stock-futures-spike-as-china-says-it-wont-immediately-respond-to-tariff-hike-2019-08-29)to
prevent escalation.
The comments, sparking hopes of a calm resolution between the
world's two largest economies, triggered a surge in European
stocks.
David Madden, CMC Markets analyst, said: "The largely hopeful
tones of the update from China has lifted market sentiment, and
that sparked buying this morning.
"US-China relations have been volatile recently, but for now
there is a sense that things are heading in the right direction,
and that has coaxed some traders back into the market."
Italy's FTSE MIB was pushed higher still after President Sergio
Mattarella gave Prime Minister Giuseppe Conte a mandate
(http://www.marketwatch.com/story/conte-asked-to-seek-new-italy-government-aimed-at-foiling-salvini-2019-08-29)
to form a government.
The country's Democratic Party and the populist 5 Star Movement
agreed to form a new coalition on Wednesday, leaving former Deputy
Prime Minister Matteo Salvini on the sidelines.
Germany's minister for economic affairs, Peter Altmaier, said
the country's corporate tax rate could be cut to 25% in a bid to
help smaller businesses amid a gloomy backdrop.
Which stocks are active?
Bouygues (EN.FR) climbed 5.8% as the French conglomerate's
first-half operating profit beat expectations due to strong
performance in its telecoms
(http://www.marketwatch.com/story/bouygues-backs-forecast-as-profit-falls-2019-08-29)
and TV businesses. The group stuck to its full-year guidance
despite weakness in its construction businesses.
Pernod Ricard (RI.FR) rose 3.1% after the Paris-based spirits
company hiked its dividend and announced a share-buyback program
(http://www.marketwatch.com/story/pernod-ricard-hikes-dividend-readies-buybacks-2019-08-29).
The company also agreed a $223 million deal to buy drinks
manufacturer and marketer Castle Brands, adding Jefferson's Bourbon
and Brady's Irish Cream to its portfolio.
Micro Focus (MCRO.LN) shares tumbled 24% after the software
company warned full-year sales could drop 6-8% on last year's, due
to a deteriorating macro environment. The largest UK-based tech
firm had previously forecast a 4-6% revenue drop.
(END) Dow Jones Newswires
August 29, 2019 06:21 ET (10:21 GMT)
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