LONDON (Reuters) – Signs of progress from U.S.-China trade talks in Beijing helped European stocks reverse earlier losses on Friday, while auto shares continued to slide after figures showing an ongoing slump in European car sales.
The trade-sensitive German index, fell as much as 0.7 percent in early deals, but recovered to trade flat on the day after U.S. Treasury Secretary Steven Mnuchin said U.S. and Chinese trade negotiators had “productive meetings”.
The STOXX 600 rose to trade up 0.4 percent by 0950 GMT, after a tepid open following weak China inflation data.
“Year-to-date Europe has been doing surprisingly well in terms of market performance, but the data is still looking pretty bad,” said Martin Moeller, portfolio manager at UBP in Geneva.
Weak car sales data weighed on autos which tumbled 0.6 percent, the worst-performing sector. Car manufacturers BMW, Daimler, and Volkswagen were among the biggest fallers on the DAX.
European car sales dropped 4.6 percent in January, industry data showed, the fifth consecutive month of declines after tougher emissions test procedures became mandatory from the start of September.
Investors are also looking to a Feb. 17 deadline for the U.S. Commerce Secretary to release a report about whether European car imports pose a national security threat.
The European market was dragged down on Thursday by very weak U.S. retail sales data but was nonetheless on track for its first weekly gain in four, having hit a three-month high on Wednesday.
The Spanish government’s widely-expected decision to call a snap election did not move the IBEX which traded up 0.4 percent at 1000 GMT.
Some strong results helped the STOXX up.
French media giant Vivendi climbed 4.6 percent after reporting strong results for its Universal Music Group arm, and confirming it would soon select financial advisors to sell a stake of up to 50 percent in UMG.
“UMG has continued to deliver strong organic revenue growth with paid streaming accelerating quarter-on-quarter throughout 2018,” said UBS analysts.
Vivendi also announced its top stakeholder, billionaire Vincent Bollore, would further withdraw from the company’s management.
Bollore, another of the billionaire’s companies, climbed 4.6 percent.
German insurer Allianz managed a 1.1 percent gain after it reported results in line with expectations.
“We think the combination of operational strength and capital management discipline shines through once again,” wrote KBW analysts.
Telecom Italia was a top gainer, up 6.2 percent after a source said Italian state lender CDP has authorization to increase its stake in the firm to 10 percent within the next 12 months.
Eutelsat sank 7.7 percent, the biggest faller on the STOXX, after its first half results. A trader said the company’s CEO A talked down the possibility of consolidation in the industry.
Swedish defense firm Saab climbed 6 percent after its fourth-quarter earnings beat expectations and it forecast better margins and sales in 2019.
M&A also moved some shares.
German internet portal Scout24 surged up 12.6 percent to the top of the STOXX after it welcomed a higher offer from a private equity consortium of Hellman & Friedman and Blackstone.
Analysts at Liberum said the bid values Scout24 at too low a multiple, raising the possibility industry peers may look to buy some or all the assets.
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