UPDATE 2-Trade optimism, upbeat earnings send European shares to 4-year peak

UPDATE 2-Trade optimism, upbeat earnings send European shares to 4-year peak

Reuters  | Nov 08, 2019 01:15

UPDATE 2-Trade optimism, upbeat earnings send European shares to 4-year peak

* STOXX 600 is now 2% away from record high
* BoE surprises as two members vote for rate cut
* Siemens hits more than 1-yr high on upbeat results
* Lufthansa jumps after unveiling cost-cutting plan
* Hiscox tumbles after brokerage downgrade

(Updates prices)
By Susan Mathew
Nov 7 (Reuters) - European shares rose for a fifth straight
session on Thursday to hit fresh four year highs as investors
cheered signs of progress in U.S.-China trade talks and largely
positive earnings reports from a host of companies.
Shares of Siemens SIEGn.DE hit their highest in more than
a year after the German industrial company beat fourth-quarter
profit expectations, while Italy's biggest bank UniCredit
CRDI.MI rose 6% after announcing its first share buyback in
more than a decade after solid third-quarter earnings.
Lufthansa LHAG.DE jumped 6.8% on plans to cut costs at
some of its units to revive profit. The German airline's shares
helped boost the wider travel and leisure index .SXTP by 1.3%,
making it one of the top gainers among the major European
sub-sectors. On the trade front, China's commerce ministry said the
world's two economic giants were working on a deal that would
roll back trade tariffs in different stages. "There are still hurdles to be overcome but it is
encouraging that, contrary to last spring, Chinese negotiators
are sending more positive signals, as well their U.S.
counterparts," said Raoul Leering, head of international trade
analysis at ING.
The news sparked a broad-based rally in Europe, while Wall
Street was pushed to a record high. Trade-sensitive Frankfurt
shares .GDAXI rose 0.8% to close at their highest level since
February 2018. .N
It also helped investors shrug off another weak data point
from Germany showing industrial output fell more than expected
in September. London's FTSE 100 .FTSE rose 0.1% as the pound GBP=
weakened after two Bank of England officials voted to lower
interest rates on Thursday, contrary to expectations of a
unanimous decision to hold rates. .L
"That suggests that the Bank is very unlikely to follow
through with its signalled rate hikes (if Brexit goes smoothly)
any time soon," ING's developed markets economist James Smith
But a 9.7% tumble in insurer Hiscox HSX.L on brokerage
downgrades and a 2.7% slip in London Stock Exchange Group
LSE.L after it said it would consult with members regarding a
shorter trading day, saw the FTSE post the smallest gains among
regional peers. The FTSE midcap index .FTMC and Irish stocks .ISEQ
gained 1.1% and 1.3%,respectively.
The pan-European STOXX 600 index .STOXX closed up 0.4%. It
is now a little over 2% away from its record high hit in April
Among the top gainers across European sub-sectors were
automakers .SXAP and miners .SXPP , while defensive plays
such as telecoms .SXKP and utilities .SX6P fell, suggesting
higher risk appetite.
The world's largest steelmaker ArcelorMittal MT.AS jumped
6.7% on better-than-expected results. Shares in wind turbine
maker Vestas VWS.CO rose 11% to the top of the STOXX 600 after
it reported forecast-beating quarterly operating profit.
French gas and power group Engie ENGIE.PA posted its
worst day in more than eight months on less optimistic guidance,
taking the utility sector .SX6P down 1.9% for its worst day in
a month.

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