European shares boosted by hopes of US-China trade deal

European shares advanced on Tuesday on mounting speculation that the US and China will be able to reach a trade deal which would ease worries over the global economy.

The pan-European Stoxx 600 index advanced 0.9 per cent as it was confirmed that officials from both countries would continue talks in Beijing for a previously-unscheduled third day, and US president Donald Trump tweeted that they were "going very well".

DUBLIN

The Iseq index of Irish shares edged 0.5 per cent higher to 5,680.57, with cardboard box-maker Smurfit Kappa, a play on global growth, standing out as the main gainer as it pushed 6.3 per cent ahead to €24.58.

Analysts at Jefferies had said in a note late last week that the paper packaging sector was set for a rally following a sell-off last year, with Smurfit Kappa offering the most upside.

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Housebuilding stocks, which were also beaten down last year, were in high demand on Tuesday, with Cairn Homes up 4.2 per cent at €1.20, and Glenveagh Properties up 3.2 per cent at 81c. Fellow property-related shares Dalata Hotel Group, Hibernia Reit and Green Reit also counted among the main advancers.

LONDON

British shares jumped to their highest in almost a month as investors eyed the US-China trade talks and as supermarket chain Tesco led a revival in retailers after upbeat sales data that helped offset Morrisons' disappointing holiday update. The FTSE 100 gained 0.7 per cent.

Stocks with a large exposure to China gained ground, with HSBC rising 1.1 per cent, Standard Chartered adding 3.1 per cent, and Prudential also climbing 2.2 per cent higher.

However, uncertainty around Britain's divorce from the Europe Union continued to weigh on sentiment, keeping many investors on the sidelines.

Sales data for the critical Christmas period from Nielsen and Kantar Worldpanel dispelled some of the Brexit gloom.

While the data showed that discount shops Aldi and Lidl gained market share, overall grocery sales in the 12 weeks to December 30th rose 1.6 per cent, according to Kantar Worldpanel.

The sector rose 2 per cent to its highest since December 7th, led by Tesco after it chalked up a gain of 0.4 per cent in the three months.

The data also lifted Next and Marks & Spencer more than 5 per cent, and comes after positive updates from Aldi UK and other high street chains that brought back some appetite for consumer shares.

EUROPE

Among individual markets Germany’s export-oriented DAX index, which is particularly sensitive to trade issues, was up 0.5 per cent, shrugging off earlier data showing that German industrial output fell unexpectedly in November for a third month running.

European technology shares were among the brightest spots, with chipmaker AMS jumping 10.8 per cent.

“European tech got hit harder last week on the back of Apple than many of the Asian and US suppliers. So there is a short-term argument that the bad news is more priced into the European names,” said Mirabaud’s Campling.

Shares in ASML, however, fell 0.7 per cent after Liberum analysts said the update from Samsung, the world's biggest maker of smartphones and semiconductors, provided a negative read-across for the Dutch company. Samsung is ASML's biggest customer.

Italian banks hit a three-week high after the Rome government's approval late on Monday of a decree aimed at shoring up troubled lender Carige.

NEW YORK

Wall Street stocks rose for the third straight session in early afternoon trading, with the Dow Jones Industrial Average gaining 0.9 per cent, the S&P 500 and Nasdaq each rising 0.6 per cent.

Amazon. com rose, adding to Monday's gains that helped the market power higher and the online retailer overtake Microsoft to become Wall Street's most valuable company.

Shares of trade-sensitive Boeing rose after the plane-maker delivered a record 806 aircraft in 2018.

Dublin-headquartered and Nasdaq-listed Icon jumped after the clinical trials company for the pharmaceutical sector issued upbeat forecasts for 2019.

-Additional reporting, Reuters, Bloomberg