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European equity markets rose, ahead of the festive break next week, with Italy enjoying strong gains on Friday.
The benchmark Stoxx 600 SXXP, +0.53% rose 0.5% in early trading. The FTSE 100 UKX, +0.20% was just 0.2% higher at 7,589 points. Other regional indexes were also flat, although Italian shares enjoyed a significant boost from some positive company updates.
Milan-listed shares gained on some positive company updates with the FTSEMIB I945, +0.86% up 0.8%. Enel ENEL, +2.16%, the country’s biggest utility, was up 2.3% after credit-ratings firm Moody’s improved its outlook to positive on Enel Americas, its Latin American business. Shares in Nexi NEXI, +1.03% were up almost 3%, after Intesa Sanpaolo ISP, +0.42% sold its merchant payments business to the local payments processor for €1 billion.
What’s moving the markets?
Sentiment among German consumers unexpectedly deteriorated with the German GfK consumer confidence reading for January falling back to 9.6 compared with the consensus of 9.8. There was also pessimism about the economic outlook for Europe’s largest economy, with the indicator losing 6.1 points to -4.4, below its long-term average of zero.
The pound GBPUSD, +0.1230% has risen 0.2% at $1.3025 as traders look ahead to the next steps in the Brexit process and the prospects of a possible interest rate cut by the Bank of England in early 2020.
The Bank of England was in focus in London on Friday after Andrew Bailey was named as the central bank’s next governor, replacing Mark Carney. Bailey, who will serve an eight-year term, is currently head of the City of London regulator the Financial Conduct Authority.
Michael Hewson, CMC Markets analyst, said that while Carney may well have been friendly in terms of his presentational style, the central bank’s forward guidance over his tenure has been less impressive. “It is almost become a standing joke over the years, with the most notable example being the guidance that the bank would look at raising rates only when the unemployment rate fell below the 7% level, only for the central bank to do nothing.”
He added: “This uncertainty over the central bank’s ability to deliver on its guidance also means that there is currently no market consensus over where rates might go next year, unlike the Federal Reserve where the policy maker message has been much more consistent.”
The Dow DJIA, +0.49% closed at record highs after Treasury Secretary Steven Mnuchin said an initial U.S.-China trade deal would be signed in early January.
Which stocks are active?
Shares in NMC Health NMC, -16.04% plunged almost 21% even after the hospital operator hit back at claims of financial mismanagement made by U.S. short seller Muddy Waters saying they were “false and misleading.” The Abu-Dhabi-based health-care provider, which published a 3,500 word rebuttal on Thursday nights after London markets closed, has seen its stock fall 40% since Tuesday when the investor first raised its concerns over the company’s finances.
Takeaway.com TKWY, -2.55% shares fell 2.06% at €87.38 even as Just Eat JE, -1.92% backed a final offer from the Dutch food delivery company and rejected a rival cash bid from Prosus PRX, +0.82% on Friday. Takeaway and Prosus made increased final bids for the U.K. company within minutes of each other on Thursday, with Takeaway’s all-share offer beating Prosus’ 800 pence-a-share offer, based on its current share price.
Royal Dutch Shell RDSA, -0.95% dipped 0.84% at 2,250 pence after the energy major said it expects impairment charges to be between $1.7 and $2.3 billion in the fourth quarter, and lowered its forecast for quarterly oil production sales amid a weaker global economy. Investors had already been warned that Shell might miss targets to cut its debt levels and increase payouts to shareholders, when it posted a 15% fall in profits in the third quarter from $5.6bn in 2018 to $4.8bn.
