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European stocks mixed after China GDP with Brexit talks underway

Stock MarketsJul 17, 2017 06:01AM ET
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© Reuters. European equities traded mixed after positive Chinese data; eyes on U.K. EU negotiations – European equities showed mixed trade on Monday as investors digested positive Chinese data and kept an eye on earnings, all while the second round of Brexit talks started up.

In midday trade in Europe, the benchmark Euro Stoxx 50 lost 0.22%, France’s CAC 40 dropped 0.14% while Germany’s DAX 30 traded down 0.41%.

A stronger-than-expected second quarter gross domestic product (GDP) reading out overnight from China helped to buoy bullish sentiment.

The world’s second largest economy grew 6.9% in the April to June period, beating expectations for the expansion to ease to 6.8%.

Other Chinese data for June such as retail sales, industrial production and fixed asset investment all beat consensus, rising more than expected.

Back in Europe, euro zone headline inflation went unrevised with June showing an annualized increase of 1.3% and core inflation steady at 1.1%, ahead of the European Central Bank’s monetary policy decision this Thursday.

The British and EU Brexit negotiators met on Monday, pledging to "get down to work" in negotiations on the U.K.'s divorce terms from the European Union.

"We made a good start last month but we are now getting into the substance of the matter," British Brexit Secretary David Davis told reporters as he was welcomed at the European Commission in Brussels by the EU negotiator Michel Barnier.

On the company front, Weir Group (LON:WEIR) led the advancers on the pan-European Stoxx 600 with gains of more than 8% after the company said it expects full-year revenue to beat analysts’ estimates.

Telenor (OL:TEL) was the second largest gainer, shooting up nearly 8% after the Norwegian telecommunications company raised its margin forecast for 2017 after reporting a strong second quarter.

At the bottom of the index, Getinge (ST:GETIb) fell more than 7% after the Swedish medical technology firm reported weaker-than-expected earnings.

GEA Group (DE:G1AG) followed at the tail end of the index with losses of 6% after the German food technology group lowered its 2017 guidance after a weak second quarter.

Meanwhile, oil prices edged lower on Monday as concerns over the global supply cut continued to support bearish sentiment.

U.S. drillers added two oil rigs in the week to July 14, energy services company Baker Hughes announced on Friday. This brings the total count up to 765, the most since April 2015, underlining concern that the ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance the market.

European energy stocks traded mixed, as French oil and gas major Total SA (PA:TOTF) lost 0.10%, Italy’s ENI (MI:ENI) gained 0.15% and Norwegian rival Statoil (OL:STL) fell 0.57%.

Financial stocks were under pressure, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) fell 0.84% and 0.84%, respectively, while Germany’s Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) traded down 0.21% and 0.67%, respectively.

Among peripheral lenders, Italian banks Intesa Sanpaolo (MI:ISP) gained 0.14% but rival Unicredit (MI:CRDI) dropped 0.35% while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) fell 0.96% and 1.14%, respectively.

In London, the commodity-heavy FTSE 100 advanced 0.22%, as exporters on the index benefitted from a weaker pound that increase earnings when foreign profits are brought back to the U.K.

Shares in Glencore (LON:GLEN) rose 1.58%, Anglo American (LON:AAL) traded up 2.10%, BHP Billiton (LON:BLT) gained 0.84% and Rio Tinto (LON:RIO) advanced 0.64%.

Energy stocks traded higher, as BP (LON:BP) gained 0.84% and rival Royal Dutch Shell (LON:RDSa) rose 0.46%.

Financial stocks saw mixed trade, with shares in HSBC Holdings (LON:HSBA) up 0.34% while Royal Bank of Scotland (LON:RBS) fell 0.36%, Lloyds Banking (LON:LLOY) lost 0.37% and Barclays (LON:BARC) traded down 0.53%.

In the U.S., stock futures pointed to a flat open. The Dow Jones Industrial Average futures inched up 0.01%, S&P 500 futures slipped 0.02%, while the Nasdaq 100 futures edged forward 0.03%.

European stocks mixed after China GDP with Brexit talks underway

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