European Stocks Erase Decline as Corporate News Beats China Woes
(Bloomberg) -- European stocks erased earlier losses as a rally in media, travel and real-estate shares offset tensions about China’s plans to impose a national security law on Hong Kong.
The Stoxx Europe 600 Index closed little changed on Friday, bringing this week’s gain to 3.6%, which is the biggest advance since April 10. TAG Immobilien AG surged 6.6% after German landlord LEG Immobilien AG’s approached the company about a potential takeover. Samhallsbyggnadsbolaget i Norden AB jumped 9.1% after its chief executive officer was dismissed from an insider trading probe.
Shares in the benchmark index fell as much as 1.7% earlier as China’s proposal fueled concern of fresh protests in Hong Kong and threatened to escalate tensions with the U.S. European equities lost momentum after a strong start to the week, with the top U.S. official for infectious disease saying he’s “cautiously optimistic” about Moderna’s vaccine.
“Tactically, we expect the market to pull back over the next quarter, or at least a period of heightened volatility,” Sanford C. Bernstein strategists led by Sarah McCarthy wrote. “The market multiples look vulnerable given the scale of the recession we are likely facing, plus uncertainties remain over easing of restrictions.”
Autos advanced after Bank of America Corp. said carmakers are “upbeat” about business prospects once disruption from the pandemic wanes.
U.K. financials with heavy exposure to Hong Kong slipped as China’s attempt to tighten its grip on the city fueled a political backlash. HSBC Holdings Plc fell 5%, while rival lender Standard Chartered Plc declined 2.4% and insurer Prudential Plc tumbled 9.2%.
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