European shares head for best week since July

Published: September 14, 2018 15:45:55 | Updated: September 16, 2018 12:28:21

European shares headed for best week since July on Friday, technology, autos and mining stocks led the gain, after Asian markets climbed on hopes of new trade talks between the United States and China.

The pan-European STOXX 600 was up 0.1 per cent by 0830 GMT, set to seal its strongest weekly gains in seven weeks. It had pared its gains somewhat after rising as much as 0.5 per cent in early trading.

Analysts and traders saw new trade talks as a positive for the market but they pointed to lingering nerves in the market, reports Reuters.

Germany's trade-sensitive DAX .GDAXI managed a 0.2 per cent rise, in line with the leading euro zone stocks index .STOXX50E.

Topping the STOXX was bank and asset manager Investec (INVP.L) which jumped 12 per cent after saying it would demerge and separately list its asset management arm.

Mining stocks climbed 0.6 per cent as copper held near a two-week peak, helped by hopes of an easing of trade war tensions.

Tech stocks were also among top gainers, up 0.2 per cent after Apple climbed further on Wall Street following Europe’s close, fuelling a rebound in the tech sector.

Chipmakers AMS, Infineon, and Siltronic were up 2.4 to 6.3 per cent. STMicro got an additional boost when Bank of America Merrill Lynch analysts upgraded the stock to “neutral”.

 Autos rose 0.7 per cent, building on the previous session’s rise as China and the US planned a new round of trade talks to defuse a dispute that has disrupted markets.

UK housebuilders Taylor Wimpey and Barratt Development were the worst-performing FTSE 100 stocks.

They fell 0.8 to 0.9 per cent after Bank of England Governor Mark Carney warned ministers that a no-deal Brexit could cause house prices to fall by 35 percent over three years, according to the Times.

Investors have been shunning European stocks in favour of US stocks this year, lured by significantly stronger earnings growth there.

Overall the market is currently short European equities, according to Bank of America Merrill Lynch.

Some $57 billion has flowed out of Eropean equity funds over the past six months, strategists at the US bank said, citing EPFR data.

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