EUROPE MARKETS: European Markets Green As Trade Talk Optimism Spreads; SocGen Up On Cost-cut Talk

By Emily Horton

Germany narrowly misses falling into recession

Europe's markets were positive on Friday, after investor optimism from U.S.-China trade talks spread through the indexes.

How are markets performing?

The Stoxx Europe 600 gained 0.2% to 371.33, after finishing down 0.3% on Thursday.

Italy's FTSE MIB index was the regions top climber, adding 0.3% to 20,277.26.

Meanwhile the rest of Europe's major indexes added around 0.3% on Friday, with the German DAX (DAX) rising 0.6% to 11,487.86, the FTSE 100 jumping 0.6% to 7,206.28 and France's CAC 40 rising 0.4% to 5,214.81.

The euro climbed on Friday, fetching $1.1331 from $1.1337 late in New York on Thursday, while the pound dropped 0.4% to $1.2989 from $1.3040.

What's driving the markets?

As this week's trade talks between the U.S. and China come to a close, investors are optimistic about progress, with President Donald Trump reportedl (https://www.reuters.com/article/us-usa-trade-china-trump/trump-to-meet-chinese-vice-premier-liu-he-on-friday-white-house-idUSKCN1QB05V)y set to meet with China's top trade negotiator on Friday. Although negotiations appear to be moving forward, officials from both sides have reportedly (https://www.reuters.com/article/us-usa-trade-china/us-china-haggle-over-toughest-issues-in-trade-war-talks-idUSKCN1QA2NH) struggled to agree on specific language as they develop the framework of a potential trade deal.

Germany's economy narrowly missed falling into recession in the final quarter of last year (http://www.marketwatch.com/story/german-economy-narrowly-avoids-recession-2019-02-22), official data from the Office of National Statistics showed on Friday. Higher state spending and booming construction prevented the Europe's largest economy from slumping.

However, the Ifo Institute announced on Friday Germany's business sentiment had d (http://www.marketwatch.com/story/german-business-sentiment-hits-4-year-low-2019-02-22)ropped to a four-year low (http://www.marketwatch.com/story/german-business-sentiment-hits-4-year-low-2019-02-22) in February, a sign the slowdown felt in the second half of 2018 has continued into 2019.

The final eurozone CPI reading for January inflation also due out on Friday, which is "expected to show that headline inflation fell further from 1.6% to 1.4%, with core prices set to stay unchanged at 1.1%," according to Michael Hewson, chief market analyst at CMC Markets UK.

What stocks are active?

FTSE 250-listed challenger bank Metro Bank PLC (MTRO.LN) gained 5%, after it was awarded GBP120 million in funding from Banking Competition Remedies Ltd (http://www.marketwatch.com/story/metro-bank-receives-1566-million-in-funding-2019-02-22). The funding, which is part of a GBP775 million Royal Bank of Scotland PLC (RBS.LN) scheme designed to boost competition in the business banking sector, was awarded to the retail bank despite its recent serious account errors.

Société Générale S.A. (GLE.FR) added 2%, after the French investment bank said it was considering cutting "hundreds or even thousands of jobs" (http://www.marketwatch.com/story/socgen-may-cut-thousands-of-jobs-bloomberg-2019-02-22) in an effort to offset growing cost pressure from regulation, Bloomberg reports.

Meanwhile, Swedish bank Swedbank AB (SWED-A.SK) added 4%, while Barclays (BCS) lost 2% after lackluster earnings on Thursday.

(END) Dow Jones Newswires

February 22, 2019 08:59 ET (13:59 GMT)

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