Europe open: Stocks add to gains as analysts debate outlook

Stocks have gotten off to a mildly positive start, following bumper gains during the week before, amid an ongoing debate among analysts regarding the outlook for shares in 2018.

As of 0931 GMT, the benchmark Stoxx 600 was edging higher by 0.25% or 0.98 points to 398.33, alongside gains of 0.40% to 13,369.35 on the German Dax and a rise of 0.28% to 5,486.10 for the Cac-40.

On that note, earlier Sentix's barometre of Eurozone investor sentiment advanced from a reading fo 31.1 for December to 32.9 in January (consensus: 31.3).

However, Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, pointed out that: "The headline was lifted by upturns in both the current situation and expectations indices, signalling that investors sentiment have rebounded at the start of 2018, partially reversing the dip at the end of last year.

"Equities in the Eurozone have been range-bound—and broadly unchanged—since May, but have rallied strongly in the first few sessions of the year. Excess liquidity suggests that the gains will be sustained, but trailing foreign inflows suggest that a lot of the good macro news already have been priced in."

Reflecting such concerns, Michael Hewson, chief market analyst at CMC Markets UK, pointed out to clients how the German Dax was still shy of the record highs posted several months ago, despite which it notched up gains of 3.5% over the previous week.

Hewson added: "Having got off to such a positive start in 2018 and with economic data continuing to look reasonably resilient despite a fairly average US jobs report, investors continue to appear to be happy to push this bull market even higher, despite some misgivings that, particularly in the case of US markets valuations remain stretched."

Acting as a backdrop, over the weekend Germany's CDU/CSU and the SPD began 'exploratory' talks, with an expected end date of 11 January, on the possibility of forming a coalition, with the SPD set to vote at a special party conference on 21 January on whether to enter formal negotiations with that same aim.

On the economic front, Germany's Ministry of Finance said factory orders declined by 0.4% on the month in November (consensus: 0.0%).

In parallel, the European Commission reported that its consumer confidence index for the single currency bloc in December printed at 0.5, unchanged from a preliminary estimate.

German sportswear-maker Adidas was on track to quadruple its digital sales by 2020 to €4.0bn, the company's chief Kasper Rosted told the Frankfurter Allgemeine Sonntagszeitung.

Meanwhile, Deutsche Telekom shares were making headway despite a report in Wirtschaftswoche, citing consultants at FAS AG, according to whom the introduction of IFRS 16 accounting rules might force the operator to add at least €14.4bn of leasing liabilities to its estimated debt pile.