European markets close higher as investors watch U.S. stimulus, earnings
Sat Oct 24 2020
Mark Cooper (1967 articles)

European markets close higher as investors watch U.S. stimulus, earnings

European markets closed higher on Friday as investors monitored signs of progress toward a U.S. stimulus deal and digested a raft of major corporate earnings

The pan-European Stoxx 600 provisionally closed about 0.5% higher, with banks jumping over 2.5% on the back of strong earnings to lead the gains while retail stocks slumped around 0.9%.

European stocks tracked gains on Wall Street after House Speaker Nancy Pelosi indicated that she and Treasury Secretary Steven Mnuchin were “just about there” in discussions over a new coronavirus aid bill.

However, Pelosi cooled anticipation of legislation being in place prior to the Nov. 3 election, suggesting it could be “a while” for the bill to be written and signed.

U.S. markets were mostly lower Friday as a decline in Intel pressured the broader tech sector. The chipmaker’s shares fell sharply following the release of mixed quarterly numbers.

Meanwhile, in a breakthrough on the treatment front, the U.S. Food and Drug Administration on Thursday approved Gilead Sciences’ antiviral drug remdesivir as a treatment for Covid-19.

Back in Europe, the U.K. and European Union ramped up daily talks on Thursday as time ticks away for both sides to agree on a post-Brexit trading arrangement.

On the data front, the flash euro zone PMI composite output index, which looks at activity in both manufacturing and services sectors, dropped to a four-month low in October to 49.4, versus 50.4 in September. A reading below 50 represents a contraction in activity.

Earnings in focus

Barclays on Friday reported a net profit of £611 million ($797.7 million) for the third quarter, more than double analyst expectations of £273.5 million, in part due to a sharp reduction in coronavirus-related impairment charges. Barclays shares added over 8% by the afternoon, leading a broad rally for banks.

Daimler upped its 2020 profit outlook on Friday as strong third-quarter demand in China helped boost margins at its Mercedes-Benz cars division. The German automaker’s shares edged slightly higher.

Swedish mining company Epiroc and France’s Elis climbed nearly 6% after strong third-quarter results, while Hydro added almost 7% after its earnings report.

At the bottom of the European blue chip index, Swedish engineering company AF Poyry fell 12% after the pandemic hit third-quarter sales.

Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.

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