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UPDATE 2-European stocks end higher as Stellantis, luxury stocks jump

Published 18/01/2021, 10:49
Updated 18/01/2021, 18:12
© Reuters.

© Reuters.

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* Carrefour erases merger-related gains
* Stellantis jumps in its first day of trading
* Luxury stocks boost markets

(Updates to market close)
By Sruthi Shankar
Jan 18 (Reuters) - European stocks rose on Monday as a jump
in carmaker Stellantis and luxury stocks helped reverse early
market losses due to worries about an economic recovery and
losses in French grocer Carrefour.
The pan-European STOXX 600 index .STOXX closed 0.2% higher
after see-sawing through the session. Trading globally was
subdued with U.S. markets closed for Martin Luther King Day.
The German DAX .GDAXI rose 0.4%, boosted by a 4.8% jump in
Adidas ADSGn.DE , while UK's FTSE 100 .FTSE slipped 0.2% and
France's CAC 40 .FCHI rose just 0.1%.
Luxury stocks including Richemont CFR.S and LVMH LVMH.PA
were among the top boosts to the STOXX 600 after bullish
brokerage calls. European bourses took little cheer from data showing a
better-than-expected quarterly rebound in China's economy as
investors feared that tight coronavirus restrictions and
potential challenges to vaccine supplies could dent European
economic growth in the first quarter. "Given how far stocks have come since the end of October
some hesitancy about the next steps is understandable – much of
the good news that may be imparted by earnings season has
already been factored in," Chris Beauchamp, chief market analyst
at IG, said in a note.
European earnings season will kick into high gear in the
coming weeks, with analysts predicting a 26.3% drop in
fourth-quarter profit for companies listed on the STOXX 600, as
per Refinitiv I/B/E/S estimates.
Investors also kept an eye on political developments in Rome
as Prime Minister Giuseppe Conte faces two days of parliamentary
votes that will decide if his fragile coalition can cling to
power. Attention is especially focused on the 321-seat Senate,
where Conte looks certain to fall short of an absolute majority.
However, Italian stocks .FTMIB outperformed as shares in
Stellantis STLA.PA STLA.MI jumped 7.6% in their first day of
trading on the completion of the $52 billion merger between Fiat
Chrysler and PSA. Its shares rose 6.9% in Paris markets.
M&A also drove big swings in stocks.
Carrefour CARR.PA slid 6.9% after a possible takeover for
16.2 billion euro ($19.6 billion) by Canadian rival Alimentation
Couche-Tard ATDb.TO unravelled over the weekend.
The stock erased almost all its gains since the deal was
announced last week, with the French government opposing the
deal, citing food security concerns. French waste and water management company Suez SEVI.PA ,
which is fighting a takeover approach from arch-rival Veolia
VIE.PA , rose 3.2% after it said it had received an alternative
proposal from investment firms Ardian and Global Infrastructure
Partners. Shares in Veolia fell 1.8%.
Finland's Tikkurila TIK1V.HE surged 16.5% after Dutch
paints and coatings maker Akzo Nobel AKZO.AS entered the race
to buy its rival with an offer 13% higher than a bid from U.S.
rival PPG Industries PPG.N .

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