European Stocks Rally on Optimism About Economy
24 Gennaio 2020 - 2:06PM
Dow Jones News
By Avantika Chilkoti
European stocks rose Friday as fresh economic data signaling a
halt to the slowdown in the German manufacturing sector buoyed
investors' sentiment.
The pan-continental Stoxx Europe 600 index gained 1.2%, while
futures tied to the Dow Jones Industrial Average edged up 0.3%.
Preliminary data on purchasing managers' indexes, closely
watched measures of business activity, suggested that the
manufacturing sector in the eurozone -- and Germany, in particular
-- fared better than the market had expected in January. Factories
in the region saw export orders begin to stabilize after a long and
deep decline, and while the manufacturing sector continued to
contract, it was at a slower pace than previous months.
"The markets are reacting to the signs of bottoming in German
manufacturing," said Mike Bell, global market strategist at J.P.
Morgan Asset Management. "It's pretty key because the big question
on everyone's mind has been: is there recession risk? And the most
obvious risk there was a downturn in European manufacturing."
Ahead of the opening bell in New York, shares in Intel rose over
5%. On Thursday, the giant chip maker reported fourth-quarter
earnings that beat expectations following an upswing in
personal-computer shipments and robust demand for chips to power
data centers.
Rival chip maker Broadcom gained 3.4% in offhours trading after
the company said Thursday that it had secured multiyear supply
agreements to provide wireless components for Apple products.
Within European equities, Ipsen plunged over 25% after the
French biopharmaceutical company paused trials on a drug for
ultrarare bone diseases, and said it's evaluating the implications
on its 2022 financial outlook. Rémy Cointreau retreated 9% in Paris
after the beverages maker reported disappointing sales.
Shares in Ericsson dropped 6.4% after higher costs weighed on
the telecommunications equipment company's latest earnings, and it
said expenses will continue to rise this year.
Meanwhile, Carrefour rose 5.3% after the French retailer boosted
its guidance for 2019 earnings, exceeding investors'
expectations.
U.K. stocks also advanced, with the FTSE 100 index climbing 1.7%
after the latest purchasing managers index data was better than
analysts expected.
The readings are "the surest sign yet that the economy has
turned a corner since the election," and would likely mean the Bank
of England holds off cutting rates later this month, analysts at
Capital Economics said in a note.
Over in Asia, Japan's Nikkei 225 benchmark closed up 0.1% and
Hong Kong's Hang Seng finished the day up almost 0.2%. Chinese and
Korean markets were closed for public holidays.
Later in the day, IHS Markit is scheduled to publish the latest
PMI data for the U.S., which may show very modest slowdowns in the
manufacturing and services sectors while remaining in expansion
territory.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
January 24, 2020 07:51 ET (12:51 GMT)
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