European stocks recover after ECB disappointment

June 7, 2019

(Reuters) – European stocks were in recovery mode on Friday after a cautious message from the European Central Bank hit investors’ appetite for risk in the previous session, with traders eyeing a U.S. jobs report and U.S. trade tussles with Mexico for fresh direction.

Automakers climbed on a report that U.S. President Donald Trump could delay the tariffs he had threatened to put on Mexican goods as soon as this coming Monday, while French drugmaker Sanofi gained on its appointment of a new chief executive.

The pan-regional STOXX 600 index rose 0.6% by 0717 GMT, on track for its best weekly performance in two months. France’s CAC 40 outperformed its euro-peers with a 0.9%, helped by French pharma giant Sanofi.

Investors have largely favored defensive sectors such as utilities and healthcare in a week that has seen stock markets globally gain despite uncertainties over trade and monetary policy.

Signals from the U.S. Federal Reserve that interest rate cuts are on the cards have been at the heart of those moves, and monthly U.S. non-farm payrolls on Friday are likely to set the tone for the next week.

In fresh evidence that the trade friction and uncertainty over Britain’s chaotic Brexit process were taking a toll, data showed German industrial output fell more than expected in April.

However, the broader recovery in the region helped Germany’s DAX rise 0.6%.

Sanofi gained 3.1% after appointing Paul Hudson, a top executive at its Swiss rival Novartis, as its chief executive officer.

Carmakers and suppliers gained 0.5% and the energy sector outperformed with oil majors Total and BP PLC up about 1% as crude prices jumped. [O/R] The recovery in oil prices, however, took a toll on airline stocks, with Air France, EasyJet plc and Lufthansa down between 0.2% and 0.9%.

(Reporting by Sruthi Shankar and Medha Singh in Bengaluru; editing by Patrick Graham)

Comments (No)

Leave a Reply