European Stocks Rise as LVMH, Daimler Rally; Brexit in Focus
(Bloomberg) -- European equities advanced as luxury goods, travel and autos sectors rose, outweighing concerns over rising coronavirus cases and the state of progress in Brexit trade talks.
The Stoxx Europe 600 Index closed up 1.3%. LVMH shares hit their highest level since January, after the firm benefited from a rebound in appetite for Louis Vuitton goods in the third quarter. Daimler AG rose 5.5% after its profit beat estimates thanks to recovering car sales and cost cuts. Thyssenkrupp AG rose 11% after Sanjeev Gupta’s Liberty Steel said it bid for the company’s steel unit.
Despite the day’s rebound, the Stoxx 600 Index posted a weekly loss of 0.8% as worries over a rise in infections and tighter restrictions across the region’s cities weighed on risk assets. David Holohan, a senior equity portfolio manager at Mediolanum, said that further lockdown measures linked to an increase in virus cases will damage economic growth and make it harder to firms to plan for the final quarter of the year.
“As we go through earnings season, while the third quarter will have shown improvement from the second quarter, I suspect a lot of management teams will now be very cautious as to what the current environment means for their full-year guidance,” Holohan said by phone.
On the Brexit front, negotiations between Britain and the European Union are set to continue next week even after Boris Johnson said he believes a trade deal is now unlikely. The prime minister said the U.K. will now get ready to leave the bloc’s single market and customs union at the end of the year without a new agreement in place.
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