European stocks climb as investors monitor coronavirus spread, economic data
The pan-European Stoxx 600 was up 0.5% by mid-morning having earlier notched a new record high. Basic resources and household goods added 0.8% to lead gains as most sectors and major bourses entered positive territory.
China’s National Health Commission said that as of Tuesday night, a total of 74,185 cases of the new coronavirus had been confirmed in the country and 2,004 people have died. A slight slowing of the rate of new cases has lifted investor sentiment, while markets are also monitoring China’s attempted return to production following a prolonged shutdown which has sparked fears over global supply chains.
European shares were also bolstered slightly by a weaker euro, though the common currency edged up 0.1% to trade at around $1.0802 on Wednesday morning.
Asian stocks recovered slightly on Wednesday, led by a 1.08% jump for Japan’s Nikkei 225, while mainland Chinese and Hong Kong markets all edged cautiously higher.
Back in Europe, the EU will on Wednesday launch the first of a series of white paper proposals aiming to help European companies capitalize on their vast quantities of industrial data, while reining in U.S. tech behemoths Facebook, Google and Amazon.
Meanwhile the EU’s top competition chief, Margrethe Vestager, told CNBC on Tuesday that the prospect of the U.S. government taking a stake in top European 5G players Nokia and Ericsson was not off the table, providing there is no security risk.
Both the EU and the U.K. have struck defiant tones ahead of negotiations over a new trade deal following Britain’s exit from the bloc, and Reuters reported Tuesday that the EU had hardened its stance, demanding fair competition guarantees which will “stand the test of time.”
On the data front, U.K. inflation unexpectedly hit a six-month high in January, with consumer prices rising at an annual rate of 1.8% versus 1.3% in December. The proximity to the Bank of England’s 2% target means the central bank will likely steer clear of rate cuts in the immediate future. Sterling edged back above $1.30 in reaction to the figures.
Stocks on the move
Puma shares jumped 8.3% after the German sportswear brand beat fourth-quarter sales and earnings expectations, and said it still hopes to reach 2020 targets despite an expected first-quarter hit from the coronavirus outbreak.
Deutsche Telekom on Wednesday forecast that growth in its core earnings would slow to 3% this year after a strong fourth quarter. Europe’s largest mobile operator projected adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) hit 25.5 billion euros ($27.5 billion), missing analyst expectations. Deutsche Telekom shares gained 3% in early trade.
At the bottom of the European benchmark, Ageas shares fell 5.7% after the Belgian insurer missed full-year earnings expectations and warned of the direct impact of claims linked to the coronavirus outbreak.
Italy’s Campari slipped 2.2% after reporting weak fourth-quarter earnings and downbeat 2020 guidance, while Royal Mail dropped 4.1% after Liberum cut its price target for the stock on the grounds that 2024 transformation targets are undeliverable.