Trade optimism sends European shares to 4-year peak
Nov 7: European shares rose for the fifth straight session on Thursday and hit their highest in four years as investors cheered signs of progress in US-China trade talks and largely positive earnings reports from a host of companies.
Shares of Siemens (SIEGn.DE) hit their highest in more than a year after the German industrial company beat fourth-quarter profit expectations, while Lufthansa (LHAG.DE) jumped 6.5per cent on plans to cut costs at some of its units to revive profit.
The German airline's shares boosted the wider travel and leisure index .SXTP by 1.4per cent, making it one of the top gainers among the major European sub-sectors.
"Most market-optimism this week has been induced by the increasing chances of a mini trade deal between the US and China," said Timme Spakman, trade economist at ING.
"There are still hurdles to be (crossed) but it is positive that not only US officials are optimistic but Chinese negotiators are sending positive signals as well."
China and the United States have both agreed to cancel in phases the tariffs imposed during their prolonged trade war, the Chinese commerce ministry said.
The news sparked a broad-based rally in Europe on Thursday, with trade-sensitive Frankfurt shares .GDAXI rising 0.7per cent to their highest level since February 2018.
It also helped investors shrug off another weak data point from Germany showing industrial output fell more than expected in September.
All eyes will now be on a Bank of England meeting later in the day, where the central bank is expected to hold interest rates steady ahead of a snap election in the UK on Dec. 12 to decide the fate of Brexit.
The FTSE midcap index .FTMC and Irish stocks .ISEQ gained 0.76per cent and 1.22per cent, respectively.
The pan-European STOXX 600 index rose 0.4per cent. It is now 2per cent away from its record high, last hit in April 2015.
Among the top gainers across European sub-sectors were automakers .SXAP and miners .SXPP, while defensive plays such as telecoms .SXKP and utilities .SX6P fell, suggesting higher risk appetite.
Italy's biggest bank UniCredit (CRDI.MI) rose 4.7per cent after posting a 26per cent rise in adjusted net profit in the third quarter, while the world's largest steelmaker, ArcelorMittal (MT.AS), jumped 7.2per cent on better-than-expected results.
Shares in wind turbine maker Vestas (VWS.CO) jumped 9.7per cent to the top of the STOXX 600 after it reported forecast-beating quarterly operating profit.
But Commerzbank AG (CBKG.DE) fell 2.5per cent after the German bank warned that its 2019 profit would come in lower than last year.
German broadcaster ProSiebenSat.1 Media (PSMGn.DE) tumbled 7.8per cent after its third-quarter core profits fell by 35per cent as a decline at its core television advertising business accelerated. -Reuters