European stock markets edged tentatively higher Tuesday, buoyed
by forecast-beating gross domestic product and industrial
production data out of China, and upbeat earnings from technology
heavyweight Apple Inc.
Following a turbulent period last week, which saw many indexes
slump to one-year lows on concerns over the health of the global
economy and the risk of the eurozone slipping back into recession,
the Stoxx Europe 600 was up 0.8% by midmorning Tuesday, reducing
its year-to-date loss to 2.4% and decline so far in October to
below 7%.
Overnight, figures showed that China's economy grew 7.3% in the
third quarter, the slowest rate of growth since the first quarter
of 2009 but a touch faster than expected.
"Markets were already pricing in a risk of a soft [Chinese
economic report] so the result is seen as a relief," strategists at
BNP Paribas wrote in a note.
Barclays' economists said that they now see small upside risks
to their 2014 growth forecast of 7.2%.
Credit Suisse said that Chinese industrial production, which
accelerated to 8% in September from a five-year low of 6.9% in
August, was particularly encouraging.
In the U.S. on Monday, stocks closed the session higher, buoyed
in part by Apple reporting a 13% rise in quarterly profit, driven
by booming sales of its new iPhones. In Europe, those result
supported shares in chip maker Infineon Technologies AG while the
Stoxx Europe 600 Technology index gained 0.25%.
Share in Swiss biotech company Actelion Ltd. were the index's
biggest gainers, however, rising more than 7% on strong quarterly
sales and an upgrade to the company's full-year guidance.
At the other end of the spectrum, Reckitt Benckiser Group PLC
was the biggest loser after the consumer goods company reported a
weaker-than-expected rise in third-quarter revenue and cautioned
that full-year sales would come in at the lower end of its
previously forecast range.
Shares in oil major Total SA came under early pressure too, on
the death of the company's Chairman and Chief Executive, Christophe
de Margerie, but have since bounced back.
Mr. de Margerie was killed on Monday, when his private jet
collided with a snow-removal truck maneuvering on the runway of a
Russian airport.
Credit strategist James Sparrow at BNP Paribas said the French
industry had "sadly lost a very influential figure" but that the
news was unlikely to have an impact on the company's debt. "France
needs more like him and now, sadly, it has one less," said Anthony
Peters, a broker at Swiss Investment Corp.
In other corporate news, shares in Shire PLC clambered to the
top of London's FTSE 100 index on news that the health care group
and AbbVie Inc. had officially agreed to terminate their $54
billion deal.
As a result of the termination, AbbVie has agreed to pay Shire
the breakup fee of about $1.635 billion, which it said would be
"Shire's sole and exclusive remedy for all losses and damages in
connection with the transaction."
Savvas Neophytou, an analyst at Panmure Gordon & Co., said
he now expects Shire to "recommence its acquisition spree which
should boost organic double digit growth to high teens over the
long term."
In currency markets, the dollar was marginally lower against the
euro midmorning at $1.2818, with Lee Hardman, a currency strategist
at Bank of Tokyo-Mitsubishi UFJ, attributing the move to a more
dovish outlook for Federal Reserve policy action.
"The Fed is still expected to end quantitative easing this month
but is now not expected to begin raising rates until late in 2015,"
he wrote in a note.
The buck also retreated 0.4% against the yen and 0.2% against
the Swiss franc. It was broadly unchanged against the British
pound, which traded at $1.6170.
In commodity markets, Brent crude was 0.7% higher on the day at
$86.05 a barrel. Gold added 0.6% to $1,251.90 a troy ounce.
Write to Josie Cox at josie.cox@wsj.com
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