Europe midday: Upbeat earnings continue to drive stocks
European stocks continued their positive trend at midday on Friday, driven by upbeat corporate earnings in the luxury sector.
The pan-European Stoxx 600 index was up almost 1% with all major bourses higher. US futures were creeping into positive territory.
Investors were still keeping close watch on the rising number of coronavirus cases across the continent and Britain’s response to an EU ultimatum on a post-Brexit trade deal. Also due out later in the day are US retail sales, industrial production and a consumer sentiment survey.
Growing coronavirus cases across Europe have unsettled investors who fear another round of strict lockdowns as London and Paris were placed under new restrictions.
“This raises the very real fear that what is a stop-gap measure actually turns out to be something slightly longer term, which could see the collapse of hundreds of businesses as well as the decimation of an already fragile economy,” said CMC Markets Michael Hewson.
UK Prime Minister Boris Johnson was due to make a statement on Friday on whether the Britain would continue Brexit talks with the EU as a summit of the bloc's 27 leaders was due to conclude later.
In corporate news, shares in high-end retailers were on the march, led by LVMH Moet Hennessey, up 7% as the luxury goods outfit reported strong growth at its Louis Vuitton and Dior brands.
Hermès International, Burberry, Kering and Christian Dior all rose on the news.
LVMH shares hit a 10 month high on the back of better-than-expected third quarter numbers revealing like-for-like (LFL) sales at its leather goods and fashion business jumped by 12% to €5.9bn, offseting steep falls in cosmetics and watches. Analysts were anticipating a decline of 1%.
"Luxury brands tend to hold up relatively well during downturns because the mega-rich can ride out the economic turbulence better that middle income earners," said David Madden at CMC Markets.
ThyssenKrupp shares soared 14.5% on reports that Liberty Steel is interested in acquiring its steel business.
Daimler shares were higher as the German auto maker reported third-quarter earnings above market consensus, and guided for a strong final three months.
Hedge fund Man Group gained after it reported a 4% rise in third-quarter funds under management partly thanks to "robust" net inflows, although it also struck a note of caution about the outlook.
Outsourcer Serco surged after upgrading its 2020 guidance thanks to strong revenue growth in the third quarter and good cost control.
On the downside, pub chain JD Wetherspoon slumped after it swung to an annual loss as it felt the full impact of the coronavirus lockdown and said the government’s latest set of curbs had led to a 15% fall in like-for-like sales in the first 11 weeks of the current fiscal year.
The company reported a pre-tax loss of £34m compared with £102m profit a year ago. Revenue fell by a third to £1.26bn and the final dividend was scrapped.