Europe midday: Stocks in the green after positive eurozone data
European stocks nudged higher as investors are unperturbed by US President Trump’s radical policies, while also taking in some positive eurozone data.
At midday, the benchmark Stoxx Europe 600 rose 0.12%, France’s CAC 40 was up 0.33% and Germany’s DAX edged 0.19% higher.
Meanwhile oil prices were mixed with West Texas Intermediate down 0.32% to $52.46 and Brent crude up 0.07% to $55.27.
Joshua Mahony market analyst at IG said: “European markets are attempting to break from the negative spiral that has been evident so far this week, with the outcry caused by Donald Trump’s travel ban causing widespread selling throughout global markets. Despite the obvious moral impact the travel ban has had, the impact to the majority of businesses is likely to be minimal, providing a great buying opportunity.”
US President Donald Trump signed an executive order last Friday banning the entry of nationals from Syria, Iran, Sudan, Libya, Somalia, Yemen and Iraq into the US, as part of his aim to “keep radical Islamic terrorists out of the US”.
On the data front, the eurozone’s gross domestic product rose by 0.5% in the fourth quarter compared to the three months to September and 1.8% from the same quarter in 2015, according to a flash estimate by Eurostat.
Inflation in the 19 countries that share the euro also rose to 1.8% from 1.1% in December, above analysts’ expectations for 1.5% and marking the highest inflation rate since February 2013. The European Central Bank’s target is to keep inflation just below 2%.
The eurozone unemployment rate, on the other hand, unexpectedly fell to 9.6% from a downwardly-revised 9.7% in November and 10.5% in December 2015. This is the lowest rate recorded in the bloc since May 2009 and came in ahead of analysts’ expectations for a reading of 9.8%.
German unemployment, in particular, fell to a record low in January with jobless claims dropping by 26,000 from December far surpassing economists expectations of a 4,000 decline.
On the corporate front, Deutsche Bank was in the black despite being slapped with a £163m fine by the UK’s Financial Conduct Authority for failing to maintain adequate anti-money laundering controls. The FCA said that as a result of its inadequate AML control framework, Deutsche was used by unidentified customers to transfer around $10bn, of unknown origin, from Russia to offshore bank accounts in a manner that is “highly suggestive of financial crime”, between January 2012 and December 2015.
Swedish retailer H&M rose as its pre-tax profit for the fourth quarter beats analysts’ expectations.
Online supermarket Ocado was a high riser as it reported a rise in full-year core earnings and revenue, although there was no news on a long-awaited international deal, while drinks company Britvic also advanced as it reported growth in first-quarter revenue and said it was confident it will meet market expectations for the full year.
Irish convenience food group Greencore gained ground as it posted 17% growth on the year in group revenue for the 13 weeks to 30 December to £417m.
Givaudan was weaker as its net profit for 2016 and its dividend fell short of expectations, while Finnish pulp and paper maker UPM-Kymmene tumbled on the back of a cautious outlook for this year.
UniCredit was on the back foot after the Italian lender said it expects a net loss of about €11.8bn for full-year 2016.