European shares tick higher after steep pullback on coronavirus fears
Reuters
Published Jan 28, 2020 04:39AM ET
By Medha Singh
(Reuters) - European stocks edged higher on Tuesday, after posting their worst day in about four months in the previous session on heightened concerns about the potential impact on businesses from the coronavirus outbreak.
The pan-European STOXX 600 index (STOXX) rose 0.1% as markets monitored developments on the outbreak in China that has claimed 106 lives so far. Monday's pullback had wiped out around 180 billion euros of market capitalization from the European companies index.
Airbus (PA:AIR) was the biggest boost to the benchmark index, after the planemaker agreed to reach a settlement with French, British and U.S. authorities regarding a probe into allegations of bribery and corruption.
"It's just a rebound as markets await further information on what's happening with the virus situation in China," said Russ Mould, investment director at broker AJ Bell.
"We're moving into the results season with some European heavyweights slated for today, central bank meetings this week and Brexit on Friday. There is lots to keep people occupied."
Shares of Europe's most valuable technology company SAP (DE:SAPG) dropped 2.5% as the software provider's in-line results failed to impress investors. Some analysts also pointed to the company's slowing cloud revenue growth.
Dutch firm Philips (AS:PHG) slipped 1.3% after the health technology company's quarterly sales fell short of estimates. The company is also said it was looking to sell its domestic appliances division.
Among lenders, Swedish bank Swedbank (ST:SWEDa) gained 3.3% after a better-than-expected fourth quarter profit while Spain's state-owned lender Bankia (MC:BKIA) slipped 3.3% after a wider-than-expected quarterly loss.
Luxury goods makers Burberry Group Plc (L:BRBY), Gucci owner Kering (PA:PRTP) and Moncler SpA (MI:MONC), reversed early gains to extend Monday's slide. LVMH (PA:LVMH) bucked the trend to rise 0.3% ahead of its results.
As the week progresses, investors anticipate central bank meetings with the Federal Reserve's decision on interest rates due on Wednesday and the Bank of England's policy stance expected on Thursday. Financial markets see a nearly 60% chance of a rate cut in Britain.
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Britain is also set to formally leave from the European Union on Friday, followed by a "business as usual" transition that ends next December. The two sides will also start trade talks in the coming days.
Written By: Reuters
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