January 26, 2021

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European Stocks Close Slightly Higher

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European stocks closed slightly higher on Wednesday after a volatile session amid uncertainty about near term outlook.

U.S. stimulus hopes and rollout of Covid-19 vaccines in many countries supported the market, while rising coronavirus cases and tighter lockdown measures weighed on stocks.

Political uncertainty in the U.S. as House Democrats prepare to impeach President Donald Trump for a second time weighed as well. Democrats plan to impeach Trump over allegations that he incited last week’s violent attack on the U.S. Capitol building.

The move by Democrats comes as Vice President Mike Pence has indicated he will not invoke the 25th Amendment as part of an effort to remove Trump from office.

The pan European Stoxx 600 edged up 0.11%. Germany’s DAX and France’s CAC 40 advanced 0.11% and 0.21%, respectively, while the U.K.’s FTSE 100 ended lower by 0.13%. Switzerland’s SMI ended 0.26% down.

Among other markets in Europe, Austria, Denmark, Greece, Iceland, Netherlands, Spain, Sweden and Turkey closed higher.

Belgium, Finland, Ireland, Norway, Poland and Portugal closed weak, while Czech Republic and Russia ended flat.

In the UK market, Ocado Group, Pennon Group, Morrison Supermarkets, Next, Smith & Nephew, DCC, Sainsbury J, National Grid and Aveva Group gained 2 to 3.5%. United Utilities, Aviva, AstraZeneca, Vodafone Group and Severn Trent also ended notably higher.

On the other hand, Persimmon tumbled more than 6%, Just Eat Takeaway ended lower by 4.3% after announcing it would delay its planned delisting from Euronext Amsterdam.

IAG, Standard Chartered, HSBC Holdings, Rio Tinto, Barratt Developments and Rolls-Royce Holdings lost 2 to 4%.

In France, Carrefour soared more than 13% after Alimentation Couche-Tard Inc., the convenience-store giant that owns the Circle K chain, said it’s exploring a transaction with the French grocer.

Teleperformance, Danone, Atos, Orange, Engie, Capgemini, Legrand and Pernod Ricard gained 1 to 3%. Total saw some brisk buying after the company said it has signed a cooperation agreement with natural gas and electricity supplier Engie SA to design, develop, build and operate the Masshylia project.

Valeo, Renault, Technip, Unibail Rodamco, ArcelorMittal, Michelin, Safran and Sodexo ended sharply lower.

In the German market, Bayer rallied nearly 4.5%. RWE, Vonovia, Deutsche Wohnen and E.ON. also posted strong gains. Deutsche Post gained after reporting that its fourth-quarter preliminary group EBIT was about 1.960 billion euros, up 56% from last year.

Thyssenkrupp, Lufthansa, Daimler, BMW and HeidelbergCement ended notably lower.

Spanish telecom stock Telefonica surged up nearly 10% after the company announced a $9.4 billion sale of phone masts to American Towers.

In economic news, a report from the Bank of France said the French economy contracted in the final quarter of 2020 despite easing of the Covid-19 containment measures in December.

The bank said the economy shrank 4% sequentially in the fourth quarter, taking the annual fall for the whole year of 2020 to 9%, unchanged from the previous estimate. In the third quarter, GDP grew 18.7% sequentially after the lifting of the containment measures.

Germany’s wholesale prices declined at the slowest pace in ten months in December, data from Destatis showed. Wholesale prices fell 1.2% on a yearly basis in December, following a 1.7% drop a month ago. On a monthly basis, wholesale price growth accelerated to 0.6% from 0.1% in November.

Eurozone industrial production growth accelerated unexpectedly in November, climbing by 2.5% month-on-month, faster than the 2.3% increase seen in October, data from Eurostat showed. This was the fastest growth in four months and far exceeded the economists’ forecast of 0.2%.

On a yearly basis, the decline in industrial production slowed to 0.6% from 3.5% in October. Output was forecast to fall 3.3%.

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2021-01-13 13:29:47


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