Europe: Shares buoyed by improved US-China trade hopes

[BENGALURU] European shares rose on Wednesday from the previous session's more than one-month closing low on positive sentiment underpinned by easing fears over the path ahead for US-China trade ties and strong results from some German firms.

Resolute earnings from Siemens and Wirecard aided sentiment, while the White House said China has indicated it wants to strike a trade deal.

The pan-European STOXX 600 index rose 0.2 per cent, lifting off Thursday's more than one-month closing low. Germany's trade-sensitive gained 0.7 per cent, while French stocks tacked on 0.4 per cent.

"All we need to know is how the next 48 hours unfold with China's vice premier in Washington for talks," said Craig Erlam, senior market analyst at Oanda.

Chinese Vice Premier Liu He will travel to Washington on Thursday for two days of trade talks. As it currently stands, US tariffs on US$200 billion worth of Chinese imports will rise to 25 per cent from 10 per cent effective Friday, according to a notice posted to the Federal Register.

"I'm still under the belief that a deal is the default and that's what people are expecting," Oanda's Mr Erlam said.

Siemens posted better-than-expected quarterly earnings and said it would spin off its faltering gas-turbines business.

Investors responded by sending the German firm's shares 4.6 per cent higher, which helped industrial stocks tack on 0.7 per cent.

Payments firm Wirecard raised its 2019 outlook, as it sought to shake off allegations of fraud and false accounting to post a 40.7 per cent rise in core profits in the first quarter.

Wirecard shares climbed 4.9 per cent to a more than three month closing peak after its chief executive said the payments firm is mulling over buying back shares with some of the proceeds of a 900 million (S$1.4 billion) euro convertible bond that Softbank Group Corp will buy.

Signs of Brexit-linked uncertainty capped sentiment towards London-traded stocks. The FTSE 100 index recovered from early losses to add 0.2 per cent, amid a half-per cent slide in the pound. Exporters on the benchmark broadly benefit from a softer pound which swells their overseas earnings' value.

Bank stocks moved in the other direction, extending losses as they slipped 0.3 per cent.

Travel and leisure stocks fell 1.3 per cent as Deutsche Lufthansa AG traded ex-dividend, down 4.4 per cent. Additionally, Berenberg cut its target price on the airline to 21.50 euros per share from 22 euros.

REUTERS