European Companies Rise Amidst Marginal Pressure
Europe’s benchmarks set for shares rose marginally on Friday while companies like Sweden’s Elekta and France’s Sopra Steria saw a huge rise in stocks as a result of the news from the U.S.-China trade talks.
Stock indexes of Europe such as STOXX 600 and Germany’s DAX rose up by 0.2 and 0.3 percent respectively, with the main action at the share level.
French IT services and consulting firm Sopra Steria topped the STOXX 600, rose by 17.8 percent after the company reported its annual reports and claimed that it was targeting an improvement in margins this year.
“This should help ease concerns of on-going pricing pressure as the worst seems to be behind us now following the profit warning in Q3 2018,” said Georgios Kertsos, an analyst at Berenberg.
Chipmaker ASM International’s share price rose by 11.9 percent after it’s fourth-quarter order revenue hit a record high of 301.6 million euros, which was above its forecast.
Its strong results slammed a trend of weakness going on in the semiconductor sector due to supposed hit by trade tariffs and slowing global car demand.
Swiss-based construction chemicals producer- Sika rose 4 percent after annual profit beat the forecast.
Swedish radiation therapy equipment producer Elekta rose by 13.5 percent after the company reported third-quarter earnings below market expectations, and cut its full-year margin forecast.
Margin pressure has been looked into the European share-market this financial season, as the gap between revenue amassed and earnings amassed growing as companies face rising costs.
UBS strategists have reported that this gap has reached an eight-year high.
Elsewhere the food and beverage sector was the worst-performing, down 0.8 percent, after U.S.-based Kraft Heinz reported weak results.
AB Inbev fell by 3.6 percent; Nestle plummeted by 0.9 percent, and Danone dipped 0.5 percent. Unilever also dropped 1.6 percent.
3G Capital has shares in both Kraft Heinz and AB InBev.
RBC analysts said that:
“Given overlapping ownership between the two companies and similar cultures of margin maximization, we wouldn’t be surprised if investors make some connection.”
Saint Gobain shares plummeted by 1.6 percent after the company reported a drop in annual net profit because of asset impairments amid uncertainty over the economy.
French meal vouchers firm Edenred rose by 5.3 percent after reporting record 2018 earnings and sounding a confident note about growth this year.
In the UK, Britain’s largest dairy food company, Dairy Crest surged 15.3 percent after Canadian company Saputo bought the former for about $1.3 billion.