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Stocks - Europe Pushes Higher; Helped by China Cash Injection, BP Update

Stock MarketsFeb 04, 2020 03:44AM ET
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By Peter Nurse - European stock markets pushed higher Tuesday, helped by positive updates from the likes of BP (LON:BP) and Glencore (LON:GLEN), and given a strong helping hand by a major liquidity injection from the central bank that underpinned Chinese markets after Monday’s plunge.

At 03:40 ET (08:40 GMT), the U.K.'s FTSE index was trading 106 points, or 1.5%, higher, France's CAC 40 was up 54 points, or 0.9%, while the DAX gained 125 points, or 1%. The Euro Stoxx 50 index, which measures the movement of blue chip stocks in the eurozone, rose 34 points, 0.9%.

Oil giant BP (LON:BP) struck a sharp contrast with arch-rival Royal Dutch Shell (LON:RDSa) when it posted its full-year results, boosting its dividend payout. A 26% drop in fourth-quarter profit on lower oil and gas prices still beat forecasts. BP shares climbed 3.8%.

Shares in Glencore (LON:GLEN) climbed over 5% after the commodity trading and mining company maintained its 2020 targets unchanged despite a weak end to 2019. The world's biggest miner posted a 6% fall in fourth-quarter copper production and a 13% decline in cobalt.

Carlsberg (CSE:CARLa) on Tuesday reported operating profit for the second half of the year that was broadly in line with expectations, but the brewer said it expects to deliver only mid-single-digit organic operating profit growth in 2020, down from last year. Still, shares rose 1.6% after worries it could be harder hit.

Earlier Tuesday, financial markets on the Chinese mainland reversed some of the steep losses of Monday, when they reopened after an extended Lunar New Year holiday. The blue-chip Shanghai Composite index closed over 1% higher, compared with Monday’s drop of 7.7%, thanks mainly to the People's Bank of China saying it will inject a total of 500 billion yuan into the money market to "maintain reasonable and adequate liquidity in the banking system during the period of epidemic prevention and control."

The country's central bank had already trimmed interest rates and injected 1.2 trillion yuan into the markets on Monday, although most of that was rolling over liquidity it had provided before the holidays.

Additionally, China’s securities regulator sought to limit short selling and stop mutual fund managers selling shares unless they face investor redemptions, Reuters reported.

Turning back to Europe, the economic data calendar is a little bare, with just the U.K. construction PMI data for January and eurozone producer prices of note, leaving eyes to focus on the ongoing earnings season.

Jeweler Pandora's fourth-quarter operating profit beat forecasts despite disappointing sales in China, but it said its 2020 organic sales growth will fall by 3%-6%. Shares dropped 3.5%.

On Wall Street, Google parent Alphabet (NASDAQ:GOOGL) reported after hours Monday, missing analysts' estimates while offering up its worst fourth-quarter revenue growth since 2015.

The earnings releases will continue today from the likes of Snap (NYSE:SNAP) and Walt Disney (NYSE:DIS), while eyes will also be on the State of the Union speech by U.S. President Donald Trump as his impeachment trial continues.

Oil prices rose on Tuesday with technical experts from OPEC+ expected to meet at the cartel’s Vienna headquarters later in the day to study the coronavirus' impact. There has been talk that the group will decide to cut production to try and raise prices from these weak levels.

AT 03:40 AM ET (0840 GMT), U.S. crude futures traded 1.2% higher at $50.73 and the international benchmark Brent contract rose 0.7% to $54.80. Gold futures for February delivery on New York’s COMEX, by contrast, were 0.6% lower at $1,572.95.

Stocks - Europe Pushes Higher; Helped by China Cash Injection, BP Update

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