Europe close: Stocks finish higher but with utilities and technology pacing gains
Stocks remained higher at the end of the week after the world's health watchdog chose not to label the new Chinese coronavirus a global health emergency and thanks to a much better than expected reading on euro area manufacturing.
Nonetheless, by the end of the session, early gains for Travel&Leisure and Basic Resource stocks had given way to advances on the Stoxx 600 for Technology and Utilities.
"Stocks declined recently for fear the situation would turn into a global crisis, but the update from the WHO has acted as a green light to the bulls," said David Madden at CMC Capital Markets UK.
Yet overnight, Chinese authorities extended travel curbs to 10 cities with an approximate population of 40.0m people, and on Friday, the US Center for Disease Control in Atlanta was expected to reveal a third case of the virus, reports of which sent Wall Street tumbling and saw shares on the Continent trim their advance.
By the end of trading, the benchmark Stoxx 600 was 0.86% ahead to 423.64, alongside a gain of 1.41% for the German Dax to 13,576.68, while the French Cac-40 was 0.88% higher to 6,024.26.
The Stoxx 600 sector index for utilities was up by 1.80%, followed by another gauge tracking Technology which leapt 1.57% thanks to better-than-expected results out of US chipmaker Intel released the night before.
As an aside, some equity strategists were increasingly cautious, regardless of the situation in China.
Bank of America told clients on Friday that if the US Federal Reserve signalled "carry on liquidity" at its policy meeting during the following week, then "irrational bullish phase continues in Q1".
In a separate note, BofA said it had turned "tactically neutral" on European equities, but stayed overweight cyclicals against defensives.
On the economic side of things, IHS Markit's Purchasing Managers' Output Index for euro area manufacturing rose from 46.1 in December to 47.5 for January (consensus: 46.8).
Economic growth in the Eurozone failed to accelerate yet again at the start of 2020 but the worst of the downturn in manufacturing looked to have passed and business confidence across the single currency bloc notched up a 16-month high, the survey compiler said in a statement.
Shares of Carrefour were near the top of the leaderboard after the French grocer posted an acceleration in like-for-like sales to 3.1% in fourth quarter, helped by a return to growth in Spain and bumber sales in Brazil. Carrefour also guided towards a 7.4% rise in full-year recurring operating income to €2.09bn, with double-digit growth expected in its home market.
Elsewhere on the Paris bourse however, shares of Ipsen had gone into reverse in a big way after local media said that it had stopped recruiting patients for phase III clinical trials of Palovarotene, a treatment for fibrodysplasia ossificans progressiva.
Its shares fell 23%.
Remy Cointreau was near the bottom of the pile, with its stock plummeting by about 9%, after the spirits maker posted a 9.7% fall in in third quarter sales to €290.2m and suspended its financial guidance, telling shareholders that it would outline a new strategic roadmap later in 2020.
Sweden's Ericsson was another top faller on the Stoxx 600, shedding nearly 6% of its market value, despite posting a sharp turnaround in fourth quarter profitability versus the year before.
Scandinavia's largest tiremaker, Nokian Renkaat Oyj was also rolling lower at a brisk pace, falling 8% following its latest update to investors and weighing on stock of sector peer Pirelli.
Renault was also lower, by roughly 2%, adding to the previous session's retreat, as was K+S AG on the back of continued selling pressure on oil prices.
CAC 40 - Risers
Carrefour (CA) 15.32 +4.79%
Safran (SAF) 146.85 +3.34%
ST Microelectronics (STM) 27.68 +2.52%
Airbus SE (AIR) 139.12 +2.44%
Dassault Systemes (DSY) 163.95 +2.09%
Legrand SA (LR) 73.26 +1.83%
Air Liquide (AI) 130.65 +1.63%
Veolia Environnement (VIE) 26.93 +1.62%
Schneider Electric (SU) 94.00 +1.60%
Saint Gobain (SGO) 35.17 +1.47%
CAC 40 - Fallers
Valeo (FR) 28.48 -2.47%
Renault (RNO) 36.31 -1.81%
Pernod Ricard (RI) 164.40 -0.84%
TECHNIPFMC (FTI) 16.54 -0.63%
Vivendi (VIV) 24.84 -0.56%
Publicis Groupe Sa (PUB) 41.30 -0.43%
Kering (KER) 571.10 -0.40%
Essilorluxottica (EL) 138.70 -0.36%
Michelin (ML) 106.95 -0.19%
BNP Paribas (BNP) 49.88 -0.15%