European shares steady as GDP numbers loom
European shares traded sideways on Friday as investors awaited fourth-quarter GDP data from across the euro zone, and another jump in coronavirus cases followed World Health Organization (WHO) assurances that the trajectory of the outbreak had not changed.
Among big movers was British drugmaker AstraZeneca, which sank more than 5% and was on track for its worst day since mid-2017 after it fell short on quarterly earnings and warned the coronavirus was liable to hurt sales for months.
Royal Bank of Scotland Group PLC also dropped to the bottom of the STOXX 600 after flagging a new strategy to slash its investment bank and rename the company.
The pan-European STOXX 600 index was largely unchanged by 0856 GMT, having briefly touched a record high of 431.51. However, the index was on course for a second straight week of gains thanks to a relief rally earlier in the week.
Fourth-quarter EU flash GDP estimates at 1000 GMT are expected to show the European economy barely expanded between October and December amid a manufacturing slump and global trade headwinds.
Data from Germany, the bloc’s biggest economy, came in below expectations, setting a gloomy tone for the cumulative figure due later.
“We started the year thinking that eventually the euro zone in 2020 was going to grow above trend,” said Andrea Cicione, head of strategy at TS Lombard in London.
“The impact of the coronavirus (however) seems to be something that could damage Europe disproportionately in comparison to the developed world, because of the reliance on China.”
Real estate <.SX86P> and utilities <.SX6P> were the best performing European sectors for the day, rising about 0.9% each.
Utilities were boosted by France’s Electricite de France SA, which topped the STOXX 600 after its annual core earnings beat expectations.
German stocks were flat.
Easing some concerns over the virus outbreak in China, the WHO said a large jump in new coronavirus cases seen on Thursday was due to a change in classification methods, and did not necessarily reflect the “tip of an iceberg” of a wider epidemic.
China-sensitive sectors such as basic resources and travel and leisure, which had been heavily sold off at the start of the outbreak, were slated to be the best weekly performers among their peers after seeing strong rebounds.
“Our take is that (the outbreak) will prove to be a one-off, and therefore the market is discounting that,” TS Lombard’s Cicione said.
French carmaker Renault fell sharply after posting its first annual loss in 10 years.
Source: Reuters (By Ambar Warrick)