Reuters | Oct 25, 2019 01:00
(For a live blog on European stocks, type LIVE/ in an Eikon
* Daimler up on higher Mercedes-Benz sales
* Nokia logs worst day on record after results
* Euro slips after Draghi's last policy meet
(Updates to market close)
By Sruthi Shankar
Oct 24 (Reuters) - With no fireworks from European Central
Bank chief Mario Draghi's last policy meeting on Thursday,
encouraging results from German heavyweights and British
drugmaker AstraZeneca drove European stocks to their strongest
close since January 2018.
Frankfurt shares .GDAXI touched a 16-month high, pushed
higher by a 3.4% gain for the world's largest chemical company
BASF after it confirmed its annual outlook even as operating
income tumbled 24% in third quarter. Daimler DAIGn.DE rose 3.3% after reporting a slight rise
in quarterly operating profit, boosted by sales of Mercedes-Benz
cars. Shares of trade-sensitive automakers .SXAP and chemical
companies .SX4P , which have taken a toll from a bruising
U.S.-China trade war and signs of slowing global growth, rose
1.1% and 0.8%, respectively.
The pan-European stocks index .STOXX rose 0.6% to 397.37,
its strongest closing level in over 20 months.
"We're seeing a bit of blue sky rather than the torrent of
negativity that has generally been associated with both
automotives and exporters," said Edward Park, deputy chief
investment officer at London-based firm Brooks Macdonald.
"Stock markets are reacting more favourably to those that
are beating expectations or at least guiding towards a more
Healthcare stocks .SXDP rose 1.5%, leading gains among the
major European subsectors. AstraZeneca AZN.L jumped 5.6% after
lifting its annual drug sales forecast following a surge in
revenue from newer cancer treatments.
European markets entered the third quarter earnings season
this month in nervous form, with signs that Germany was heading
into recession weighing on expectations for growth across the
Data on Thursday showed euro zone business activity
stagnated in October as demand withered, according to a survey
published on Thursday hours before ECB's Draghi made his
swansong appearance. In response, the euro weakened against the dollar, while
eurozone stocks .STOXXE gave up some gains before closing 0.4%
At the last press conference of Draghi's eight-year tenure,
the man credited with saving the euro from collapsing kept the
door open to even more easy money, days before he hands the
reins over to Christine Lagarde on Oct 31. The ECB made no new policy moves on Thursday, having decided
in September to restart bond purchases at a pace of 20 billion
euros per month while also cutting its deposit rate to -0.5%.
"The incoming ECB President, Christine Lagarde, will have
plenty on her plate, bearing the weight of Draghi's legacy with
little ammunition left and growing discontent within the
Governing Council around the latest QE programme," Andrea
Iannelli, investment director at Fidelity International, said in
a client note.
"She will have to use all her political skills to navigate
still-troubled waters, amid trade wars and a slowing domestic
On a sour note, Nokia's shares NOKIA.HE recorded their
biggest percentage drop on record, plummeting 23.4% after the
company cut its 2019 and 2020 profit outlook due to pressure
from rivals in the 5G industry. The telecom maker's report weighed on Helsinki-listed stocks
.OMXHPI , which fell 1.5%.
Chipmakers came out with mixed results, with Aixtron
AIXGn.DE and Siltronic WAFGn.DE reporting a fall in third
quarter sales, while Dialog Semiconductor DLGS.DE raised its
forecast for the third quarter.
Written By: Reuters
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