Europe Gains as ‘Encouraging’ Politics Overshadow Negatives
(Bloomberg) -- European shares opened higher on Thursday, reaching the highest level so far this year, after a mixed Asia and positive U.S. markets. Trade tensions were once again a central theme after a report the White House may push back its tariff deadline.
“Encouraging politics have overshadowed disappointments on the economic (especially in Europe) and earnings outlook,” said Lippo Suominen, chief strategist at Finnish asset manager FIM. “Earnings are now expected to fall in the first quarter, but at the same time investors are expecting a healthy growth comeback later this year.”
The Stoxx Europe 600 Index gained 0.6 percent, with the industrial sector at the top. France’s Airbus SE will stop making its double-decker flagship A380 -- a decision that immediately also turned focus on the planemaker’s suppliers, including Rolls-Royce Holdings Plc and Safran SA. Among banks, Credit Suisse Group AG’s revenue beat estimates, while trading revenue dropped at Credit Agricole SA and Commerzbank AG resumed paying a dividend.
The threats that drove markets down in the autumn have eased early this year, said Suominen.
The “latest is that political risks seem to be declining one-by-one” as President Donald Trump has been forced and seems to be open to make some compromises, Suominen said. “He seems to be giving up on demands for the wall and also willing to further extend the deadline for raising China tariffs.”
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