Europe close: Stocks move higher on hopes coronavirus spread slowing
Stocks on the Continent started February with small gains as the latest updates from the World Health Organisation appeared to show that the rate of growth in the number of new coronavirus infections worldwide had fallen.
"All three reports consistently show that the daily growth rate in new cases continues to moderate, the mortality rate of the virus stays notably low and the outbreak remains extremely concentrated," said analysts at ShoreCap.
Nevertheless, Dr. Adam Barker and Dr. Tara Raveendran at ShoreCap cautioned that the cat was not yet in the bag, telling clients that countries still needed to avoid new 'super-spreading events' for example.
The related death toll in China rose to 362 over the weekend and the number of confirmed cases was nearly 17,400, with Chinese investors sending the Shanghai Stock Exchange's composite index 7.72% lower to 2,746.61 upon their return from the Lunar New Year holiday.
Against that backdrop, by the end of trading, the Stoxx 600 was 0.25% higher to 411.72, alongside a 0.49% gain for the German Dax to 13,045.19, while the Cac-40 was up by 0.45% to 5,832.51.
Helping to steady nerves, Chinese authorities acted overnight to limit the fall-out in financial markets, injecting cash into the country's financial system and lowering the seven and 14-day reverse repurchase rates, thus offering lenders cheaper financing.
World Health Organisation director general, Tedros Adhanom Ghebreyesus, said there was no reason for any measures that "unnecessarily interfere with international travel and trade", although some City-based traders were wary regarding such confidence.
For his part, Ian Shepherdson at Pantheon Macroeconomics, was expecting to see signs that the number of new coronavirus cases was peaking over the next two to three weeks.
Ingenico SA was pacing gains on the Stoxx 600 after French rival Worldline SA agreed to pay €7.8bn to acquire it, marking the largest European aquisition year-to-date.
RyanAir Holdings was right behind on the leaderboard after posting a third quarter after tax profit of €88.0m against a €66.0m loss one year ago. Furthermore, the carrier raised its forecast for annual profits and its finance chief told analysts that the coronavirus might in fact boost intra-European travel.
SiemensGamesa was higher on the back of a report in Spanish daily Expansion that Iberdrola was eyeing the sale of its 8.0% stake in the windturbine maker to Siemens, together with an agreement to offer retail shareholders the option of exchanging their shares for those of the German group's newly created subsidiary, Siemens Energy.
Julius Baer was unwanted after the fund manager posted a 38.0% drop in full-year 2019 net profits to 464.8m Swiss francs, with management announcing 300 job cuts as part of a plan to stem the red ink.
But the least loved shares on the Stoxx 600 were those of UAE-focused NMC Health on heavy trading volumes.
Coronavirus aside, the focus at the start of the week was on global manufacturing with surveys out of both China and the euro area printing ahead of forecasts.
IHS Markit's factory sector Purchasing Managers' Index came in at 47.9 for January versus a reading of 46.3 for November (consensus: 47.8), with a similar gauge for China also edging past forecasts.
Late in the afternoon, the key US ISM institute's factory sector Purchasing Managers' Index for January came in well ahead of forecasts at 50.9 (consensus: 48.5).