Europe close: US-China trade hopes boost shares
European stocks ended the Monday session with slight gains, tracking gains on Wall Street as hopes of a Sino-US trade deal were reinvigorated and after the European Union granted a Brexit deadline extension.
By the end of trading, the Stoxx 600 had edged up 0.25% to 398.99, as Germany's Dax added 0.37% to 12,941.71 and the French CAC 40 rose by 0.15% to 5,730.55. Meanwhile, London's FTSE 100 was down by 0.1% at 7,331.28.
The US trade representative's office and China's commerce ministry have both made positive noises about the state of trade talks, with the former stating that officials from the two superpowers were "close to finalising" the first phase of a deal following telephone negotiations on Friday.
That was followed on Monday by remarks from the US President, Donald Trump, who said that talks with Beijing were running ahead of schedule.
Rabobank analysts said that, while some might question the importance of this development given that the “Phase 1” agreement looks to be more spin than substance, even a purely cosmetic agreement is preferable to a further escalation of tensions.
In Brexit news, the EU has agreed to extend the Brexit deadline to 31 January 2020, meaning that focus has now shifted to UK Prime Minister Boris Johnson's pursuit of a general election.
MPs are due to vote on Johnson's plan for a 12 December election, which requires a two thirds majority and is unlikely to win the backing of Labour MPs who want the Prime Minister to rule out the possibility of a no-deal scenario.
IG analyst Joshua Mahoney said: "The decision to provide an extension must be seen as a positive thing, given how close we are to a disorderly Brexit. However, while a no-deal has been averted for now, this extension points to more uncertainty and economic decline as businesses remain in the dark over where the country is heading.
"The pathway to resolving this deadlock remains far from certain, with today’s election vote likely to be rejected despite claims from all sides that they would relish a showdown at the polls."
Among individual stocks, HSBC was the top faller on the Stoxx 600 after it reported a drop in third-quarter profit, cautioned over a "challenging" environment and said the outlook for revenue growth is softer than it expected at the half-year.
Spanish lender Bankia was also lower after it booked a 23% drop in third-quarter net profit as low interest rates ensured that margins remained under pressure.
Koninklijke Philips fell after reporting a 29% drop in third-quarter net profit after the Dutch conglomerate said headwinds from tariffs contributed to a deterioration of margins at its connected-care operations.
LVMH ended lower after the French luxury group confirmed it had held preliminary discussions about a possible acquisition of US jeweller Tiffany & Co. "There can be no assurance that these discussions will result in any agreement," it said, as the company responded to weekend press reports that it had approached Tiffany with a $14.5bn offer.
Videogame developer Ubisoft was also in the green, bouncing back after its shares tanked on Friday in the wake of its newly-announced plans to delay the launch of three upcoming games until the next financial year.