By Mark Cobley
European markets mostly rose on Thursday morning, following gains across most of Asia and on Wall Street yesterday, after China said trade talks with the U.S. will resume in October.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.52% rose 0.6% after China’s commerce ministry said in a statement that vice-premier Liu He had spoken with U.S. trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and agreed on further negotiations to try to conclude a trade dispute that has rattled global markets for months.
Germany’s benchmark DAX index /zigman2/quotes/210597999/delayed DX:DAX +0.75% gained 0.9%, despite news that German manufacturing orders had slumped in July by more than expected. France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.66% also rose 0.9%.
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.34% was the only European market to decline, falling by 0.7% as the country’s political turmoil deepened. Prime Minister Boris Johnson lost a series of crunch parliamentary votes on Tuesday and Wednesday, paving the way for an election in the coming weeks or months that may determine the fate of Brexit.
But the British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD 0.0000% rallied by 0.6% on investors’ hopes that setbacks for the strongly pro-Brexit Johnson mean that the chances of a disorderly and rapid EU exit for the U.K. have diminished.
Among individual stocks, U.K. regional banking group CYBG PLC /zigman2/quotes/241062571/delayed UK:CYBG +0.42% was the worst decliner in Europe, as its shares plunged 21% after it reported a larger-than-expected bill of £300 million to £450 million ($500 million) from penalties tied to the past mis-selling of payment protection insurance, a widespread banking scandal in the U.K. Analysts at Jefferies said that the credibility of the bank’s management “is challenged on PPI, and investors are likely to avoid this share until results on November 28”.
Norwegian energy group Equinor /zigman2/quotes/203290881/delayed NO:EQNR -1.04% was the region’s top gainer, with shares climbing 8% after it announced a $5 billion stock buyback program. Shares in French aerospace group Dassault Aviation /zigman2/quotes/207053075/delayed FR:AM -0.38% rose by 7.9% after it reported strong results, and U.K.-listed engineering investment company Melrose Industries /zigman2/quotes/210306391/delayed UK:MRO +0.97% gained 6.7% after its losses halved, indicating a turnaround plan is working.