European markets close higher; tech, banks and oil record big gains

The pan-European Euro Stoxx 600 index ended provisionally higher by 1.9 percent while the FTSE 100 was up 149 points, or 2.3 percent, at 6,733 by the close of trading. In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt both ended up by around 1.7 percent.

Tech and bank stocks led the charge. Among the former, AMS, Sitronic Nam, Infineon and Logitech were big gainers while in the banking sector Banco BPM and Metro Bank attracted buyers.

Basic Resources stocks were also among those leading the gains after a rise in Chinese stocks overnight and as fears over a US-China trade war subsided.The ongoing fight between the two largest economies in the world has rattled global stock markets for much of 2018.

Rio Tinto, Evraz, Anglo-American, Glencore, Antofagasta and Randgold Resources were all bid up following a rise in metal prices.

Other sectors enjoying substantial gains on Friday morning trade include Construction & Material, Chemicals and Oil & Gas.

Friday’s gains come after heavy selling in the region on Thursday, when the DAX had closed down 2.4 percent. The German bourse is still in bear market territory, around 20 percent off its most recent 52-week high. It’s also on track for its worst month since January 2016 and its worst year since 2008.

London close: Stocks end just higher but Santa’s nowhere to be seen

London stocks ended just in the green on Friday, recovering from earlier losses but still languishing around their lowest level in more than two years amid worries about a global growth slowdown, souring relations between the US and China and the prospect of US government shutdown.

The FTSE 100 closed up 0.1% at 6,721.17, while the pound was flat against the dollar at 1.2654 and 0.4% firmer versus the euro at 1.1102.

Sino-US relations weighed on sentiment after the US Justice Department filed charges overnight accusing two members of a Chinese cyber-espionage group of hacking into dozens of US tech and industry giants. It has been alleged that the two individuals were operating in conjunction with the Chinese government, although this has been denied by Beijing.

Meanwhile, rising odds of a US government shutdown also dented the mood, as President Trump and congressional Democrats remained at odds over $5bn funding for his border wall with Mexico.

In a series of tweets, Trump threatened a “very long” government shutdown if Democrats don’t go ahead and fund his border wall. “Shutdown today if Democrats do not vote for Border Security!” he tweeted.

David Cheetham, chief market analyst at XTB, said: “December has traditionally been a good month for the benchmark in recent years, with gains seen in eight of the past 10 years, but it would take something pretty spectacular to see a monthly rise now. The size of the selling is not as dramatic as the drop seen across the Atlantic where US markets have swooned of late, but price is still down by around 4% on the month, meaning somewhere in the region of £60bn has been wiped of the value of the UK’s leading companies.

“You have to go back to 2002 to find a worse drop for the UK index in the month of December, while there’s very few who will remember the last time the Wall Street fell this hard in the final month of the year, with the current drop the largest since 1931 – when the Great Depression was taking a major toll.”

Brexit was still very much in focus as the UK government instructed UK firms to begin planning for a no-deal scenario, as the expected rejection of Theresa May’s Brexit proposal meant a messy divorce from the EU looked increasingly likely.

On the data front, lacklustre UK economic growth was confirmed, though last year’s figure was upgraded.

UK gross domestic product growth for the third quarter of the year was confirmed at 0.6%compared to the preceding quarter and 1.5% compared to the third quarter last year. This final update from the Office for National Statistics was unchanged from the previous reading.

The ONS did revise up the real GDP growth reading for 2017 to 1.8% from 1.7%.

Meanwhile, the latest GfK survey showed that UK consumer confidence fell to a five-year low in December.

GfK’s long-running consumer confidence index slipped to -14 this month from -13 in November, in line with expectations, with three of the five measures used to calculate the overall scored down, and two up.

Client strategy director Joe Staton said: “In the face of ever-rising costs, and the threat of higher inflation combined with uncertainty around the outcome of the Brexit negotiations, it’s no surprise that consumers are in a chilly mood of despondency and putting on a glum face when they look at the prospects for 2019.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Looking ahead, consumers likely will remain despondent until a no-deal Brexit is averted, but the outlook for rising real wage growth, as inflation falls further, and further marginal declines in unemployment suggests that consumers should be more upbeat in six months’ time.”

Miners were on the front foot, with Anglo American, Antofagasta and BHP Group all up as copper prices rose.

Anglo American was also in focus after saying it has resumed operations at its Minas-Rio iron ore operation in Brazil.

Just Eat was among the risers as Dutch online food delivery company agreed to buy the German business of Delivery Hero for around €930m in cash and shares.

JD Sports rallied on positive read-across after Nike released better-than-expected second-quarter earnings overnight and upped its guidance.

Peel Hunt said: “It is very clear to us that JD is seen as a key driver of Nike profitability, but on a slightly separate note it was interesting to hear that Nike considers that apparel is an ‘extraordinary opportunity for growth’, and that merchandising ‘head to toe’ looks is key.

“We have a very strong view that JD will make a success of selling apparel in the US. So Nike goes from strength to strength, and so does JD, we think.”

On the downside, Vodafone fell after saying it was looking for new auditors to replace Price Waterhouse, who are taking the company to court as part of a legal dispute over the collapse of Phones4U a few years ago.

Plastic packaging specialist RPC Group slipped after pushing back the deadline once again for private equity firm Apollo Global Management to make a takeover offer.

London close: Stocks drop amid global growth worries, Brexit exhaustion

London stocks finished lower on Friday, albeit off their worst levels of the session, following the release of weak Chinese data and after Theresa May returned home from her EU charm offensive empty-handed.

The FTSE 100 was down by 0.47% or 32.33 points to 6,845.17, while the pound was off 0.72% against the dollar at 1.2576 and 0.16% lower versus the euro at 1.1126 after European Union leaders rejected May’s plea to put a time limit on the Irish backstop, in a blow to her hopes of reaching a deal at a Brussels summit on Thursday.

May had arrived at the European Council meeting hoping to win changes on the contentious backstop, designed to stop a hard border with Ireland in the event of no-deal with the EU, and bring back a deal she get could get through parliament.

But her attempts were opposed by Ireland, France, Sweden, Spain and Belgium, who voiced doubts that the prime minister would be able to sell the technical concession to hostile MPs in Westminster.

IG market analyst analyst Joshua Mahony said: “A failure to pass this bill will likely lead us into limbo where there is insufficient support in parliament to pass any one form of Brexit.”

Disappointing Chinese data added to the gloomy mood, with industrial production up 5.4%on the year in November, versus expectations of 5.9% growth. Meanwhile, retail sales were up 8.1%, falling short of expectations for 8.8% growth and marking the weakest pace of growth since 2003.

Russ Mould, investment director at AJ Bell, said: “There is some concern that the impact of the US/China trade war has yet to be properly felt, suggesting that China’s economic data could be in for more shocks in early 2019 unless the countries secure a permanent truce.”

Striking a similar note, IG’s Chris Beauchamp told clients: “While Europe is finishing the day off the lows, on Wall Street the outlook remains grim as equities continue to give back ground won earlier in the week. It looks like the seasonal rally has been put back again, with slowing growth figures from around the globe turning investors cautious once again.”

There was some good news to be had, however, as China confirmed that it will temporarily halt its additional 25% on US vehicles. According to a release on the Chinese finance ministry’s website, China will suspend 25% tariffs on 144 vehicles and auto parts from the US and 5% on an additional 67 auto items.

The temporary halt – which was part of an agreed truce between the US and China – will kick off on 1 January for three months.

“This is a positive development no doubt, but while the US-China trade tensions are thawing slightly, they still remain frosty and are in danger of freezing back over all together at a moment’s notice,” said XTB chief market analyst David Cheetham.

Miners – which are heavily dependent on demand from China – were under pressure after the retail sales and industrial output data, with Glencore, BHP and Antofagasta all lower.

Housebuilders also retreated amid worries about Brexit, with Persimmon, Taylor Wimpey and Bellway all under the cosh.

In individual corporate news, British American Tobacco was in the red as it announced two new management board roles, in a bid to accelerate the implementation of its strategy, with a director of new categories to report directly to the chief marketing officer.

Balfour Beatty rallied as it said its performance for the year will be above previous expectations after sales of its interests in two infrastructure projects exceed directors’ valuations. The FTSE 250 construction group said it was on track to achieve industry-standard margins in all earnings-based businesses in the second half of 2018.

GVC, Paddy Power Betfair and 888 were all on the rise ahead of next week’s parliamentary vote on legislation regarding fixed-odds betting terminals.