European markets slightly higher amid Brexit uncertainty
European markets edged higher on Friday as investors monitored the ongoing Brexit uncertainty
European markets were slightly higher Friday afternoon, as investors monitored ongoing Brexit uncertainty.
The pan-European Stoxx 600 was up around 0.2% during early afternoon deals, with most sectors and major bourses in positive territory.
Europe’s banking index and autos stocks led the gains during afternoon deals, up around 0.8%.
Looking at individual stocks, Britain’s G4S surged toward the top of the European benchmark. It comes after Sky News reported Brink’s — a U.S.-based cash handling giant — was plotting a bid to acquire its cash solution business. Shares of the world’s largest security company jumped more than 6% on the news.
Meanwhile, Norwegian telecoms firm Telenor tumbled toward the bottom of the index. Shares of the company fell nearly 4% after talks with Malaysia’s Axiata about a potential joint venture ended without a deal.
On the data front, the EU statistics agency Eurostat said Friday that euro zone growth halved in the second quarter of 2019. The reading, which confirmed earlier analyst estimates, came as Germany’s economy and trade slowed.
Euro zone GDP (gross domestic product) expanded by 0.2% in the second quarter, the data showed, after a 0.4% expansion in the first three months of the year.
Market focus is largely attuned to global trade developments, after the U.S. and China agreed to hold high-level talks in early October. The news raised hopes that the world’s two largest economies could soon make substantial progress in de-escalating their protracted trade dispute.
Risk sentiment was also helped by upbeat U.S. economic data on Thursday. U.S. private payrolls increased at their fastest pace in four months in August, according to ADP. The numbers came amid speculation that the decade-long economic expansion is coming to an end.
The New York Federal Reserve puts the chance of a recession at 39% in the next 12 months, the highest level since the Great Recession that ended in mid-2009.
On Friday, the closely watched U.S. nonfarm payrolls report showed 130,000 jobs had been created in August, slightly lower than anticipated. Economists surveyed by Dow Jones had expected nonfarm payrolls to increase by 150,000.
In Europe, market participants continue to monitor political uncertainty in Britain, with 55 days to go until the world’s fifth-largest economy is scheduled to leave the European Union.
On Thursday, British Prime Minister Boris Johnson was dealt a blow when his brother, Jo Johnson, announced he was quitting the cabinet, citing “unresolvable tension” between his family loyalty and the national interest.
Sterling stood at $1.2308 Friday afternoon.
The U.K. currency had fallen to a three-year low earlier in the week, after the new prime minister stoked fears of a “no-deal” Brexit.