European shares rise on trade optimism; Michelin inflates tire makers, autos

European shares rise on trade optimism; Michelin inflates tire makers, autos

Reuters  | Feb 12, 2019 05:08AM ET

European shares rise on trade optimism; Michelin inflates tire makers, autos

By Josephine Mason

LONDON (Reuters) - European shares opened higher on Tuesday as investors cheered signs of a compromise in the standoff over the U.S. government funding and positive signals around U.S.-China trade talks, while Michelin's results pumped up tire stocks.

The pan-European STOXX 600 was up 0.6 percent at 0940 GMT, with Germany's trade-sensitive DAX up 1.1 percent and Paris' CAC 40 up 0.8 percent.

Automakers and their suppliers were the biggest gainers, up 2 percent after Michelin (PA:MICP) delivered better-than-expected results and pledged further gains in operating profit this year despite challenging conditions.

The French tire maker's shares rallied more than 10 percent and were on track for their best day in nearly a decade.

Italy's Pirelli and Germany's Continental were among the top gainers in their domestic markets and on the STOXX 600.

London indices underperformed their euro-zone peers amid caution ahead of a parliamentary address by British Prime Minister Theresa May later in the day as she struggles to secure a Brexit deal.

Highlighting the headwinds that threaten the rally in global equities so far this year, Credit Suisse (SIX:CSGN) said it was shifting to a 'neutral' stance on global equities, taking profit on its 'overweight' view.

"While we continue to expect overall attractive total returns from global equities this year, we recognize certain mounting short-term risks," it said.

"In particular, we note that investors remain thin-skinned after last December's correction."

Furthermore, the U.S.-China trade conflict could lead to renewed volatility, while growing political tensions in Italy, France and Germany and the still uncertain Brexit outcome could weigh further on European stocks, it said.

Gucci owner Kering (PA:PRTP) shares turned positive in midmorning trade as investors took comfort from upbeat comments about the Q1 outlook.

Shares had fallen as much as 3.3 percent in early deals as the better-than-expected sales failed to impress investors, a sign of the demanding expectations for luxury brand earnings following solid numbers from the sector, including LVMH last week.

Thyssenkrupp (DE:TKAG) shares fell 2 percent after its mixed report. The German steel-to-elevator maker stood by its 2018/19 targets, but warned the global economic environment is darkening after reporting a big drop in first-quarter results.

Investors continued to punish TUI as the tour operator reported a widening loss in its quarter to end-December. That follows its profit warning last week.

© Reuters. Pedestrians pass the London Stock Exchange in London

Online trading platform Plus500 (LON:PLUSP) lost more than a third of its value after the company issued a profit and revenue warning, blaming tightening EU regulation on its retail business. The news dragged peer IG with it.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (UK) English (India) English (Canada) English (Australia) English (South Africa) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes