Markets

European stocks close slightly higher as Brexit hits another roadblock

Key Points
  • Lawmakers on Tuesday night voted in principle for Johnson's Withdrawal Agreement Bill to proceed through parliament, but rejected the prime minister's plans to get it approved within three days.
  • Focus now turns to the EU for a verdict on whether to grant an extension to the October 31 deadline and for how long.

European stocks traded largely flat Wednesday after Prime Minister Boris Johnson pressed pause on the progression of his Brexit deal..

The pan-European Stoxx 600 pared early losses to trade just above the flat line by the close of play, up provisionally by 0.12%. Financial service firms led losses with a 0.6% average fall while the basket of basic resources added just below 1.1%.

Tech stocks dropped over 0.5% on the back of a bleak Texas Instruments revenue forecast, which cited persistent headwinds from the U.S.-China trade war.

British Parliament returned to business as usual after lawmakers on Tuesday night voted in principle for Johnson's Withdrawal Agreement Bill to proceed through Parliament, but rejected the prime minister's plans to get it approved within three days, which offered a limited time frame for MPs to review the legislation.

Focus is now attuned to the EU with European leaders due to deliver a verdict on whether to grant an extension to the October 31 deadline, a move recommended by EU Council President Donald Tusk, and for how long.

Should the deadline be extended to January 31, Johnson could call a general election in a bid to consolidate his mandate, with his ruling Conservative Party leading in the polls.

Earnings in focus

PSA Peugeot Citroen reported rising third-quarter revenues before the bell on Wednesday despite a gloomy outlook for the auto market. Revenue rose to 15.58 billion euros ($17.35 billion) from 15.43 billion euros a year earlier. The French carmaker expects automotive markets to decline by 1% in Europe, 5% in Latin America and 7% in China. The company's stock rose 3.2% by the end of the session.

Dutch brewer Heineken trimmed its profit forecast for the year after a drop in third-quarter sales in the Americas, causing its shares to fall 3.1%.

AkzoNobel saw its core profit jump 23% in the third quarter and announced a 500 million euro ($556 million) share buyback, leading the stock a shade under 2% higher.

Biggest movers

Pandora shares surged 16% to lead the Stoxx 600 after Carnegie upgraded the Danish jeweler's stock to "hold" from "sell", according to Reuters.

Hydro and Novozymes shares jumped 3.1% and almost 5% respectively following third-quarter earnings, while M&G got off to a strong start following its spin-off from Prudential. The investment manager's stock rose 2.4% with J.P. Morgan and Barclays initiating coverage with an "overweight" rating and Deutsche Bank initiating at "buy."

Norwegian financial services group Storebrand climbed 6.6% after strong third-quarter results, while compatriot insurance company Gjensidige Forsikring suffered contrasting fortunes following its earnings report, sliding 5.4%.

Swedbank shares dropped 4.5% after its third-quarter profit was hit hard by the cost of dealing with the fallout from its alleged involvement in a large scale Russian money-laundering scandal.

At the bottom of the European blue-chip index, Carl Zeiss Meditec shares plunged 8.8% after its third-quarter EBIT (earnings before interest and taxes) fell short of its latest guidance.