European stocks rebounded on Friday morning, looking to break a four-day losing streak after the World Health Organization (WHO) said the deadly Chinese coronavirus was not a “global emergency” yet.
The pan-European Stoxx 600 jumped 1.2% by mid-morning, with industrials climbing 1.7% to lead gains as all sectors and major bourses traded in positive territory.
Following a torrid week for stocks on the back of fears over the spread of the new coronavirus, which has killed 25 people in China and infected over 800 more, equity investors seem to be taking some heart from the WHO’s reluctance to declare the epidemic of international concern.
Stocks in Asia edged slightly higher on Friday, with the MSCI Asia ex-Japan index climbing 0.13% while Japan’s Nikkei also added 0.13%.
In corporate news, the U.K. competition regulator is scrutinizing Takeaway.com’s proposed takeover of rival Just Eat, which may delay the finalization of the deal to create one of the world’s largest takeout delivery firms, according to Reuters.
German media company Axel Springer revealed on Thursday that it plans to delist from the Frankfurt Stock Exchange following its takeover by U.S. private equity firm KKR.
Economic data in focus
Friday morning saw a raft of flash PMI (purchasing managers’ index) figures released, which showed euro zone business activity remaining weak to start the year but offered some glimmers of hope which boosted European stock markets.
IHS Markit’s euro zone composite flash PMI stayed at 50.9 in January, missing the 51.2 estimate from analysts polled by Reuters. Readings over 50 indicate growth.
The industrial slowdown in Europe continued to weigh on the headline index, with the manufacturing PMI reading coming in at 47.8, but this represented a marked improvement on December’s 46.3 and the January expectation of 46.8.
Optimism about the 2020 outlook increased, with the composite future output index advancing from 59.4 in December to 61.2, its highest since September 2018.
In the U.K., January data came in above forecast with the flash composite PMI hitting 52.4 against an expectation of 50.6, with both manufacturing and services exceeding expectations.
Stocks on the move
Earnings remain on the agenda, with Swedish telecoms giant Ericsson raising its full-year dividend before the bell on Friday but reporting fourth-quarter core earnings which fell short of analyst expectations, due to a slowdown in the U.S. business and higher costs. Ericsson shares were down 5.4% in early trade.
Virgin Money shares gained 5.7% in early deals to lead the Stoxx 600 after the bank said its chairman Jim Pettigrew is planning to retire by September 2021.
Carrefour shares added 4.5% after the French retailer reported a rise in fourth-quarter sales.
At the bottom of the European benchmark, Ipsen stock plunged more than 22% after the French pharmaceutical company paused dosing in its Palovarotene trials.
Remy Cointreau shares tumbled 8.8% after the French spirits group posted a worse-than-expected 11.3% fall in third-quarter like-for-like revenues and suspended its guidance.
Finland’s Nokian Tyres fell 8.4% after revising down its sales and profit guidance for 2020.