UPDATE 2-European shares rise as short covering, earnings help temper tepid PMIs
* Euro zone businesses starts Q2 with tepid growth
* Unilever (LON: ULVR ), Nestle, Schneider earnings boost STOXX
* Euro zone volatility stays close to record low
* Healthcare stocks drag on U.S. pharma sell-off
(There will be no European stock market report on Friday and Monday on account of Easter holidays. Reuters will resume coverage on Tuesday, April 23)
By Agamoni Ghosh
April 18 (Reuters) - European shares ended higher on Thursday as short covering kicked in ahead of a long Easter weekend and strong quarterly results including those from Unilever and Nestle tempered data showing euro zone businesses unexpectedly slowed this month.
The pan-European STOXX 600 index .STOXX rose for a seventh straight session, its best winning streak since early February with Germany's DAX .GDAXI closing at six-month highs, while London's FTSE 100 .FTSE fell, dragged by healthcare stocks.
Growth worries gripped equity markets in the early hours after surveys showed businesses across the euro zone stumbled into the second quarter as demand remained weak despite more modest price rises. data came on the heels of the German government lowering its forecast for 2019 economic growth on Wednesday, which was overshadowed by better-than-expected economic data out of China. however turned to end higher as a weaker euro and short covering ahead of Easter holidays benefited stocks.
"There is so much pessimism around Europe that the negative PMI data failed to find fresh sellers, triggering short-covering," said Giuseppe Sersale, fund manager at Anthilia Capital in Milan.
A survey of fund managers by Bank of America (NYSE: BAC ) Merrill Lynch (BAML) found earlier this week that short positioning on European equities was the "most crowded trade" for the second straight month in April. boosts from key industrial and consumer companies in the region also helped lifted STOXX with Schneider Electric SCHN.PA providing the biggest impetus after the French company beat first-quarter sales forecasts. shares of Unilever UNc.AS hit a life-high after the consumer goods group reported stronger than expected quarterly underlying sales growth, helped by increased prices and volume. boosting consumer stocks was Nestle NESN.S on higher-than-expected sales growth in Q1. But Kering PRTP.PA dropped 3.6 percent on signs of a slowdown at the French fashion company's Gucci brand. SAND.ST led gains on the STOXX after reporting a better than forecast quarterly order intake and said demand remained strong across all its business areas, sending an upbeat signal for the Nordic industrial sector. grim PMI data had a negative impact on the euro and the German 10-year bund yields DE10YT=RR , which fell further. The banking index .SX7P barely moved after five strong sessions.
Healthcare stocks .SXDP were the biggest drag with Novo Nordisk NOVOb.CO , AstraZeneca AZN.L and GlaxoSmithKline GSK.L all sliding following a sell-off in U.S. healthcare stocks over regulatory worries on Wednesday.
The United States is among the biggest markets for European drugmakers.
Osram OSRn.DE was the biggest percentage loser on the STOXX 600 after a German magazine reported that private equity groups Bain BCSF.N and Carlyle CG.O were losing confidence in their bid for the lighting group. American Tobacco BATS.L shed 1.4 percent and Imperial Brands IMB.L gave up 0.8 percent after U.S. Senate Majority leader Mitch McConnell said he planned to introduce legislation to raise the minimum age for buying tobacco products.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or