European stocks rose modestly on Thursday, following some positive economic data from Germany and France, though trading was quiet as investors looked ahead to reports on Brexit negotiations.
Where were the major benchmarks trading?The Stoxx Europe 600 Index SXXP, +0.00% rose 0.2% to 384.72. Thus far this week, the pan-European index is up about 1%, putting it on track to snap a three-week streak of declines.
The U.K.’s FTSE 100 UKX, -0.09% rose less than 0.1% to 7,578.91. Should the index end in positive territory, that would make for its fifth increase of the past six sessions, a modest rally that comes in the wake of a five-day drop ended last week.
Germany’s DAX DAX, -0.25% was flat at 12,385.41. France’s CAC 40 Index PX1, -0.09% rose 0.1% to 5,424.09.
Thus far in 2018, the pan-European index is down 1.1%, while German shares are off 4.1% and U.K. equities have dropped 1.4%. Bucking the trend, France’s index is up 2.1% in 2018, although that lags the 6.9% gain of the S&P 500 SPX, -0.04% which touched a record on Tuesday.
The euro EURUSD, -0.3535% fell against the dollar, trading at $1.1560, compared with $1.1599 late Wednesday. The euro is coming off five straight daily gains against the dollar; it remains up 1.5% against the buck thus far this week, although it is down 3.7% against it thus far this year.
What’s moving the market?In the latest economic data, the preliminary Markit purchasing managers index for eurozone manufacturing fell to 54.6 in August, a 21-month low, down from 55.1 in July and shy of the 54.9 that had been forecast. The services-sector PMI came in at 54.4, in line with forecasts.
The manufacturing-sector PMI for Germany, Europe’s largest economy, came in at 56.1 in August, below the 56.5 that had been expected. For the country’s services sector, the reading was 55.2, above the 54.1 expectation.
Markit also released preliminary reads for France, with the country’s manufacturing index coming in at 53.7 while its services sector was 55.7. Analysts were looking for 53.2 for manufacturing and 55.0 for services.
Investors continue to watch Brexit negotiations between the U.K. and the European Union, in particular for looking for insight into the implications of a “no-deal” split — or a scenario where the final deadline of March 2019 for the U.K. leaving the EU passes without any trade agreement ratified.
The U.K. government will on Thursday release the first round of documents detailing the expected impact of a “no-deal” Brexit. Among the topics expected to be covered is the banking sector.
In early trading, Standard Chartered PLC STAN, -0.40% fell 0.6%, while Royal Bank of Scotland RBS, -1.90% lost 0.9% and Standard Chartered PLC was off 0.7%. The Lloyds Banking Group LLOY, -0.97% slipped 0.5%.
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Separately, investors digested the minutes from the U.S. Federal Reserve’s latest meeting, which were released after the market closed on Wednesday. The minutes signaled broad support for another interest-rate hike in September with the U.S. economy growing strongly. However, they also expressed deep concern that a major escalation in ongoing trade disputes could derail the economy.
What stocks are in focus?Sunrise Communications Group AG SRCG, +6.16% spiked 7.3% in early trading and was the biggest gainer among European stocks.
Playtech PLC PTEC, +9.28% rose 6.4% after reporting results.
Deutsche Bank AG DBK, -2.21% fell 1.6%. Berenberg reiterated its sell rating on the stock and cut its price target, saying it was “is exposed to an industry in structural decline in which it is losing market share, and a retail business where the marginal pricing is to be breakeven.”
Ryanair Holdings PLC RY4C, +5.59% gained 5.1% after its pilot union agreed to a deal with management.
CRH PLC CRH, +2.19% rose 2.7% and was the biggest percentage gainer among U.K. stocks after it reported its first-half results. The company posted a 4.6% profit increase despite significant weather disruptions.
Novartis AG NOVN, +0.10% rose 0.3%. The company said a phase three trial for a breast-cancer treatment had met its primary endpoint.
AstraZeneca PLC AZN, -0.03% said a clinical trial of its Bevespi Aerosphere drug combination for lung disease didn’t show it to be superior to an existing inhaler treatment.
Commodity stocks were among the day’s biggest decliners. Antofagasta PLC ANTO, -1.08% fell 1.2%; it is down more than 20% thus far this month. Rio Tinto PLC RIO, -0.92% fell 0.9% and BHP Billiton PLC BLT, -1.00% was off 0.8%.
What are analysts saying?Writing about Ryanair, Neil Wilson, chief market analyst at Markets.com, wrote that the agreement “remove[s] a significant overhang for investors,” and that “this end of the labour dispute could mark a bottom for the stock.”
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