By Barbara Kollmeyer, MarketWatch
AFP via Getty Images
European stocks traded higher on Thursday, with retailers leading gains, while shares of BT Group tumbled on news of a tie-up between Liberty Global and Spain’s Telefónica.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.29% rose 0.7% to 336.84 after a 0.3% loss on Wednesday. The German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.66% gained 0.8% and the French CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.09% added 1%.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.09% rose nearly 1%, as the pound gave up an earlier rise against the U.S. dollar /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0153% after the Bank of England left key interest rates and its bond-buying program unchanged in an announcement ahead of the market open. The central bank warned that the British economy could shrink by 30% in the first half of the year due to the pandemic, and some analysts think more fiscal stimulus will be needed.
Investors have been buying global equities since the March rout on hopes of a recovery later this year, though corporate updates and persistent downbeat economic data indicate that may be a stretch as countries slowly try to reopen economies. Data out on Thursday showed German and French industrial production collapsing in March.
Stocks rose even as U.S. data showed jobless claims rising 3.2 million for a record total of 33 million. That comes a day before what is expected to be a grim monthly nonfarm payrolls report. But the Dow /zigman2/quotes/210598065/realtime DJIA +0.17% gained after Wednesday’s weaker session, last up 1.1%, or 261 points, to 23,927.
The corporate front was busy with Europe’s first major deal since the pandemic began. Shares of Telefónica /zigman2/quotes/207034643/composite TEF +0.48% /zigman2/quotes/200416613/delayed ES:TEF +1.17% fell 1.2% after the Spanish telecom and U.S. tycoon John Malone’s cable group Liberty Global /zigman2/quotes/205000522/composite LBTYA -0.44% agreed to merge their U.K. operations — O2 and Virgin Media — in a 50-50 joint venture.
Shares of BT Group /zigman2/quotes/209006687/delayed UK:BT.A +2.08% tumbled 7% on news of that fresh competition, and after the telecom said it would suspend its dividend until 2022 to fund a restructuring plan and deal with the pandemic.
The retail sector was a bright spot, with shares of Zalando /zigman2/quotes/209028521/delayed DE:ZAL +0.97% up 10% after the European e-commerce retailer reported first-quarter sales growth of 10.6%, which was sharply lower than the prior year, but it said it expected a more upbeat second quarter.
Shares of Puma /zigman2/quotes/200977650/delayed DE:PUM +0.57% rose 3% after the German-based sportswear maker reported a pandemic-driven earnings hit in the first quarter and warned of worse to come in the second. But it also reported better-than-expected sales, with the online side jumping 40%. Elsewhere, JD Sports Fashion /zigman2/quotes/207007202/delayed UK:JD +0.58% gained 4%.
Shares of Air France-KLM /zigman2/quotes/205396176/delayed FR:AF -0.34% dropped over 3% after the airline warned of a hard second quarter to come, after posting a widening loss in the first quarter. It spoke of a “high level of uncertainty on the duration of the COVID-19 crisis and impact on the macroeconomic environment,” in a press release.
Anheuser-Busch InBev /zigman2/quotes/209225053/composite BUD -1.13% /zigman2/quotes/203831500/delayed BE:ABI -0.75% shares rose nearly 3%. The world’s largest brewer swung to a net loss in the first quarter, and said it expected falling volumes to worsen in the second quarter. However, analysts cheered moves by the company to mitigate costs.