European markets close higher as investors watch U.S. stimulus, earnings

  • The pan-European Stoxx 600 provisionally closed about 0.5% higher, with banks jumping over 2.5% on the back of strong earnings to lead the gains.
  • House Speaker Nancy Pelosi signaled that she and Treasury Secretary Steven Mnuchin were “just about there” in coronavirus stimulus talks.
  • Barclays on Friday reported a net profit of £611 million ($797.7 million) for the third quarter, more than double analyst expectations.

LONDON — European markets closed higher on Friday as investors monitored signs of progress toward a U.S. stimulus deal and digested a raft of major corporate earnings.

The pan-European Stoxx 600 provisionally closed about 0.5% higher, with banks jumping over 2.5% on the back of strong earnings to lead the gains while retail stocks slumped around 0.9%.

 

European stocks tracked gains on Wall Street after House Speaker Nancy Pelosi indicated that she and Treasury Secretary Steven Mnuchin were “just about there” in discussions over a new coronavirus aid bill.

However, Pelosi cooled anticipation of legislation being in place prior to the Nov. 3 election, suggesting it could be “a while” for the bill to be written and signed.

U.S. markets were mostly lower Friday as a decline in Intel pressured the broader tech sector. The chipmaker’s shares fell sharply following the release of mixed quarterly numbers. 

Meanwhile, in a breakthrough on the treatment front, the U.S. Food and Drug Administration on Thursday approved Gilead Sciences’ antiviral drug remdesivir as a treatment for Covid-19.

Back in Europe, the U.K. and European Union ramped up daily talks on Thursday as time ticks away for both sides to agree on a post-Brexit trading arrangement.

 

On the data front, the flash euro zone PMI composite output index, which looks at activity in both manufacturing and services sectors, dropped to a four-month low in October to 49.4, versus 50.4 in September. A reading below 50 represents a contraction in activity.

Earnings in focus

Barclays on Friday reported a net profit of £611 million ($797.7 million) for the third quarter, more than double analyst expectations of £273.5 million, in part due to a sharp reduction in coronavirus-related impairment charges. Barclays shares added over 8% by the afternoon, leading a broad rally for banks.

Daimler upped its 2020 profit outlook on Friday as strong third-quarter demand in China helped boost margins at its Mercedes-Benz cars division. The German automaker’s shares edged slightly higher.

Swedish mining company Epiroc and France’s Elis climbed nearly 6% after strong third-quarter results, while Hydro added almost 7% after its earnings report.

At the bottom of the European blue chip index, Swedish engineering company AF Poyry fell 12% after the pandemic hit third-quarter sales.

 

Source: CNBC