EUROPE MARKETS: European Bourses Edge Mostly Higher As Strong Earnings Remain In Focus

By Mark DeCambre, MarketWatch

Europe's main equity benchmarks traded cautiously higher Thursday--though Italy's stock index was under pressure--as investors appeared to focus on better-than-expected corporate results rather than weakness in U.S. and Asian markets.

An announced billion-dollar pharmaceutical tie-up also was helping to buttress market sentiment.

What are markets doing?

The pan-European Stoxx Europe 600 rose 0.2% to 364.10 (http://www.marketwatch.com/story/european-stocks-see-bounce-but-on-track-for-big-weekly-declines-2018-10-12), the U.K.'s FTSE 100 added 0.2% at 7,064.19, as Brexit worries continued to influence trade.

Germany's DAX 30 advanced by 0.3% to 11,742.54, while France's CAC 40 picked up 0.1% to reach 5,151.31.

Italy's FTSE MIB Italy index gave up 0.3% to 19,395.47, amid turmoil over the country's budgetary negotiations with the European Union.

The euro was trading at $1.1524, compared with $1.1502 late Wednesday in New York. The British pound was changing hands at $1.3112, versus $1.3114 in the previous session.

Read: With 'no-deal' Brexit risk on the rise, analysts see uncertain path for pound (http://www.marketwatch.com/story/with-no-deal-brexit-risk-on-the-rise-analysts-see-uncertain-path-for-pound-2018-10-16)

What is driving the market?

Market participants pointed to strength in a recent spate of earnings as one reason that European equity indexes were tracking slightly higher, despite concerns around Britain's continuing efforts to extricate itself from the EU, which appear to have been delayed amid a border impasse.

U.K. Prime Minister Theresa May on Wednesday during a closely watched summit in Brussels suggested that she was considering an extending Brexit transition period as the British leader failed to forge a new trade and customs pact as Britain is set to exit from the EU in March. An extension could see Britain remain under EU rules until 2021 or longer, according to reports.

A so-called no-deal scenario (http://www.marketwatch.com/story/with-no-deal-brexit-risk-on-the-rise-analysts-see-uncertain-path-for-pound-2018-10-16) is looking increasingly likely European Council President Donald Tusk said earlier in the week, saying he harbored "no grounds for optimism (https://www.bbc.co.uk/news/uk-politics-45871254)." A no-deal could roil eurozone markets and produce sharp swings in the British pound.

Meanwhile, investors also watched discussions between antiestablishment 5 Star Movement and the far-right League over a full draft budget law that will be sent to the Italian parliament by Saturday, but which could draw anger from EU officials because it would increase the country's deficit and run afoul of EU rules for its members.

What are strategists saying?

"Meanwhile in the Eurozone, besides Brexit, Italy's spending plans is another worrying issue for traders as recent comments from EU officials including the president of the European Commission, Jean-Claude Junker downplayed hopes for a breakthrough," wrote Christina Parthenidou, investment analyst at XM in a Thursday research note.

What stocks are moving

Shares of Paris-based Carrefour SA(CA.FR) led pan-European gainers, rising more than 7%, after the supermarket company reported better-than-expected third-quarter sales (http://www.marketwatch.com/story/carrefour-shares-surge-after-sales-update-2018-10-18).

Unilever PLC's stock fell (ULVR.LN) on Thursday even as the maker of Breyers ice cream and Dove shampoo sold more products at higher prices, helping it deliver stronger third-quarter revenue growth (http://www.marketwatch.com/story/unilever-revenue-up-on-better-volumes-pricing-2018-10-18).

Novartis AG(NOVN.EB) raised its outlook on Thursday, and announced it would acquire radiopharmaceuticals company (http://www.marketwatch.com/story/novartis-lifts-view-announces-21b-endocyte-deal-2018-10-18) Endocyte Inc. (ECYT) in a deal that values it at $2.1 billion, Novartis's latest effort to transform into a focused-medicines company.

(END) Dow Jones Newswires

October 18, 2018 06:00 ET (10:00 GMT)

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