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European markets close higher as risk-on trade continues

運営事務局 JIMOPLE 124 November 5, 2019

European markets edged higher on Tuesday as investors await updates on a potential U.S.-China trade tariff rollback and monitor economic developments.

The pan-European Stoxx 600 provisionally climbed 0.23% by the closing bell, with basic resources jumping over 1.9% while utilities stocks fell around 0.8% to lead sectoral losses.

Asian shares rose during Tuesday's session, following record closes for stocks on Wall Street on Monday. Japanese shares led regional gains, with the Nikkei adding 1.8% during afternoon deals.

Chinese leader Xi Jinping, delivering an address at the China International Import Expo on Tuesday, called for international tensions to be resolved through discussion, urging the removal of global trade barriers.

While he did not specifically mention the U.S., his remarks came after Reuters reported that China was pushing Washington to remove more tariffs as part of a "phase one" trade agreement between the world's two largest economies.

Surveys on Tuesday showed that China's services sector slipped to an eight-month low in October, while business confidence fell to a 15-month low, according to Reuters.

China's yuan currency surged past the symbolic 7 per dollar mark for the first time since August as investors became increasingly optimistic about the prospect of a trade deal.

In the United States, Stocks opened higher on Tuesday, following records hit in the previous session, as investors grew more bullish on a potential U.S.-China trade deal as both sides consider more rollbacks in tariffs.

The Dow Jones Industrial Average rose about 30 points, while the S&P 500 and Nasdaq Composite both climbed about 0.1%. This is the third straight positive session for these indices, which all refreshed their records again on Tuesday.

Earlier in Europe, the U.K. economy made a fragile start to the fourth quarter on Tuesday as services PMI (purchasing managers' index) data edged up to 50.0 in October from 49.5 in September. A score of 50.0 represents zero growth. The all-sector PMI, which also captures manufacturing and construction, remained below 50 for a third consecutive month.

New data published by the British Retail Consortium (BRC) on Tuesday showed that consumer spending in the U.K. saw its strongest year-over-year increase in October for six months. However, the organization warned that sales growth over a 12-month period fell to a new low of 0.1%.

The BRC's chief executive told Reuters that Brexit and new uncertainties arising from the U.K.'s looming general election were creating a difficult environment for retailers.

In terms of individual stocks, earnings remained in focus as Pandora shares plunged 17.6% after the Danish jeweler swung to an unexpected net loss in the third quarter and cut its revenue guidance, hit by weak consumer demand and political turmoil in Hong Kong.

Siemens Gamesa shares tumbled 8.1% after the wind energy company cut its 2020 guidance and postponed its profitability targets by two years.

Swiss travel retailer Dufry jumped out to a 6.8% gain to lead the Stoxx 600 after beating third-quarter profit expectations.