Reuters | Feb 11, 2020 01:51
(For a live blog on European stocks, type LIVE/ in an Eikon
* Banks lead Irish shares lower after election results
* NMC Health surges on buyout approach
* Italy's Exor hits record high on plan to sell PartnerRe
* Defensive sectors - healthcare, utility - rise
* Oil, commodity, auto stocks drives losses in Europe
(Updates to close)
By Susan Mathew
Feb 10 (Reuters) - Deal talks and a rally in defensive
sectors supported European shares on Monday as investors
grappled with the potential impact of the coronavirus, while
Irish stocks were hit by a strong showing for the left-wing Sinn
Fein in a national election.
The pan-European STOXX 600 index .STOXX ended 0.07%
higher, having marked its best week in three months as part of a
broader rebound from an earlier virus-driven sell-off.
NMC Health NMC.L shot up 24% after revealing preliminary
buyout approaches from private equity firms KKR KKR.N and GK
Investment, while Italy's Exor EXOR.MI hit an all-time high
after saying it is in talks to sell reinsurer PartnerRe in a
deal that could be worth about $9 billion. At the other end of STOXX 600 were Irish lenders Bank of
Ireland BIRG.I and AIB Group AIBG.I , sliding 8.3% and 6%,
respectively as investors feared a negative impact from Sinn
Fein's policies, which include an end to tax breaks for banks.
Ireland's main index .ISEQ dropped 1.2% as significant
differences in the manifestos of the three main political
parties reduced hopes among investors for a smooth formation of
a new government.
"Sinn Fein proposals on the economy are less conservative –
especially on housing market issues - than those of Fine Gael
and Fianna Fáil, but how this election will change Irish
economic policies remains a big question mark given the
difficulty of government formation," said Bert Colijn, senior
economist, Eurozone at ING.
Oil stocks .SXEP were the worst performers in Europe,
while commodity linked stocks .SXPP also slid as crude, iron
ore and copper prices fell on worries over weaker Chinese demand
in the wake of the coronavirus outbreak. O/R
The virus has taken more than 900 lives in China, exceeding
the death toll from the SARS outbreak over decades ago and
analysts are attempting to quantify the economic fallout from
production and supply disruptions from suspended operations in
Data on Monday showed such fears had hit investor morale in
the euro zone - down for the first time in four months in
Automakers .SXAP , among the most exposed to China, slumped
0.8%. BMW BMWG.DE , Volkswagen VOWG.DE , Peugeot owner PSA
PEUP.PA and Renault RENA.PA all slipped more than 1%,
weighing on the German .GDAXI and French .FCHI indexes.
While Germany's economy may be the most hit by the outbreak,
it could also be the one that benefits the most when China rolls
out massive stimulus to support its economy, said Andrea
Cicione, head of strategy at TS Lombard. A need to ramp up
infrastructure may see it tap Germany's expertise, he said.
Defensive sectors such as healthcare .SXDP , real estate
.SX86P and utility stocks .SX6P - which investors turn to
during times of turbulence - rose more than 0.3%.
Written By: Reuters
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