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European shares supported by utilities, Safran as trade woes loom

Stock MarketsSep 06, 2018 05:23AM ET
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© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

By Danilo Masoni

MILAN (Reuters) - European shares were buoyed on Thursday by gains among utility stocks although fresh losses in emerging markets and worries Washington will follow through on plans to levy an extra $200 billion of Chinese imports kept investors on the edge.

The pan-regional STOXX 600 (STOXX) benchmark hit its lowest level since early April in early trading but later turned slightly positive to trade up 0.1 percent by 0854 GMT.

"The turmoil within emerging markets also continues, widening from Argentina and Turkey, (is) dampening global sentiment even further all the while we await the U.S. decision on additional China import tariffs," Accendo Markets analyst Mike van Dulken said.

A consultation period on the proposal to slap fresh tariffs on China ends on Thursday, paving the way for a decision, although it is unclear how quickly that will happen.

Utilities were the strongest gainers with Italy's state-controlled Enel (MI:ENEI) rising 2.5 percent after Goldman Sachs (NYSE:GS) upgraded the stock to buy. Analysts at the U.S. bank said Enel has the capacity to buy back 10 billion euro worth of shares over the coming years.

In Britain, Centrica (L:CNA) added 3.7 percent after the local regulator set an energy price cap that was at the lower range of analysts' expectations.

Top gainer on the STOXX was Safran (PA:SAF) which rose to a fresh record high after a strong update.

The world's No. 3 aerospace supplier raised full-year forecasts following better-than-expected results in the first half on strong demand for spares and services.

Safran gained 6 percent, supporting other aerospace stocks including plane maker Airbus (PA:AIR), which rose 1.8 percent.

Among top fallers was Sodexo (PA:EXHO), down 5 percent, after the French food services and facilities management group unveiled a new strategic plan that failed to dispel concerns that the road to recovery would be long.

Sodexo, whose shares been hit this year after warnings mostly related to weaknesses in the North American business, said it planned to deliver revenue growth above 3 percent by fiscal year 2019/20.

"Financial targets out to 2020 are relatively muted and would suggest it will take time for any material improvements to be delivered," RBC Capital Markets in a note.

Weir Group (L:WEIR) led fallers, down 6.3 percent after the maker of pipes for the energy and mining industries said there were initial signs of pricing pressure and flagged a softening in demand.

Apple (NASDAQ:AAPL) suppliers Dialog Semiconductor (DE:DLGS) and AMS (S:AMS) fell 2.5 and 1.5 percent respectively with traders citing disappointing August sales unveiled by Taiwanese peer Largan Precision (TW:3008).

European shares supported by utilities, Safran as trade woes loom
 

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