Europe Markets

Europe markets close higher amid global rebound; coronavirus fears linger

Key Points
  • The pan-European Stoxx 600 closed provisionally up by 1.6%, with basic resource stocks leading gains with a 3.6% jump.
  • Global markets are seeing a rebound in sentiment after sharp declines related to concerns over the spread of the coronavirus.
  • Danish hospital equipment maker Ambu led the gains in Europe after reporting double-digit sales growth for the first quarter.

European markets closed higher on Tuesday as sentiment improved and investors brushed aside economic fears over the coronavirus outbreak.

The pan-European Stoxx 600 closed provisionally up by 1.6%, with basic resource stocks leading gains with a 3.6% jump.

Global markets are seeing a rebound in sentiment after sharp declines related to concerns over the spread of the coronavirus. In Asia, mainland Chinese stocks were higher by Tuesday as investors weighed the potential economic impact of the outbreak. As of end of Monday, there were a total of 425 deaths and 20,438 confirmed cases in the country.

Two Chinese state media outlets on Tuesday urged investors not to panic over the plunge in mainland markets a day earlier.

On Wall Street, the Dow Jones Industrial Average rose 480 points as U.S. indexes also recovered from significant selling related to worries over the coronavirus.

U.S. investors also kept tabs in political news. Results from the first-in-the-nation Iowa caucuses were delayed Monday night as the state's Democratic Party said a "reporting issue" caused "inconsistencies" in some data.

Market focus in Europe was also concentrated on the forthcoming trade talks between the U.K. and EU. On Monday, both sides set out their diverging negotiating positions on a future relationship, setting up likely obstacles in forthcoming trade talks, as well as some areas where compromise could be found.

Stocks on the move

Earnings remain a key driver of individual share price action. Danish hospital equipment maker Ambu leaped 24% after reporting double-digit sales growth for the first quarter of 2019/20.

At the other end of the European blue chip index, Micro Focus saw its shares plummet 22% on the back of its chairman's resignation following a "challenging year," as the British IT company posted a pre-tax loss for fiscal 2019.

Carlsberg reported full-year sales broadly in line with expectations and forecast mid single-digit organic profit growth in 2020, sending the Danish brewer's shares around 3% higher.

Energy giant BP posted better-than-expected full-year net profit, reporting a year-on-year fall of 21% on weak oil and gas prices. BP shares climbed 4%.