Europe: Shares close at record high on US data, trade hopes

European shares closed at a record high on Friday (Oct 24), boosted by cooler than expected US inflation data and hopes of an easing in US-Chinese trade tensions, as investors assessed a slew of corporate earnings.

The continent-wide Stoxx 600 index closed up 0.2 per cent. Most major regional indices ended higher, with London’s FTSE 100 also closing at a record high.

The Stoxx 600 was up over the week, driven by consumer-facing stocks. Energy stocks also helped after the US imposed new sanctions on major Russian suppliers on Thursday over Moscow’s war with Ukraine.

On Friday, US consumer prices increased less than expected in September, keeping the US Federal Reserve on track to cut interest rates.

“Rate expectations in the US have a huge impact on financial markets in the rest of the world, and share prices in Europe are probably an effect of what we saw in the US,” said Christoph Schon, head of investment decision research, Europe, the Middle East and Africa, at SimCorp.

Industrial companies provided the biggest boost, up 0.7 per cent. Lifco gained 10 per cent after posting third-quarter results above estimates, while Saab added 6.1 per cent after the defence group raised its full-year organic sales growth forecast.

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Heavyweights including Siemens Energy and Schneider also climbed.

Financial stocks aided gains. LSEG Group jumped about 5 per cent after some brokerages raised their price targets on the stock. NatWest rose 4.9 per cent after the lender reported a higher third-quarter profit and upgraded its performance target for the year.

Conversely, consumer-facing stocks fell, with the personal and household goods sector weighed down by a near 4 per cent decline in Kering after an HSBC rating downgrade.

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The White House’s confirmation on Thursday that US President Donald Trump will meet his Chinese counterpart next week also helped sentiment, amid an upcoming deadline for an additional 100 per cent US tariffs on Chinese imports.

“There’s some hope on the trade front,” said Joost van Leenders, senior investment strategist at Van Lanschot Kempen, noting that the US-China meeting and improving earnings dynamics were supporting markets.

Better than expected UK retail sales for September and eurozone business activity data for October also cheered investors.

On the downside, Signify dropped 9.4 per cent after the world’s biggest lighting products maker reported a steeper than expected drop in third-quarter sales.

Hiab slumped 13.3 per cent to the bottom of the Stoxx 600 after the engineering group reported third-quarter results below forecasts.

However, Valeo jumped 10.8 per cent to top the index after its quarterly results, while Sanofi rose 2.5 per cent after its third-quarter profit beat expectations. REUTERS