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European shares flat as uncertainties on trade war, Turkey remain

Published 17/08/2018, 09:50
© Reuters. Traders from BGC, a global brokerage company in London's Canary Wharf financial centre react as European stock markets open
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By Julien Ponthus

LONDON (Reuters) - European shares were steady in early trade on Friday as investors were cautious about the Turkish lira's recovery as well as the latest efforts by China and the United States' to avert a trade war.

While the mood was upbeat on Wall Street with gains for the main indexes, trade in Asia was more subdued, including in China where the Shanghai composite index (SSEC) falling 1.3 percent.

At 0822 GMT, the pan-European STOXX 600 (STOXX) was up 0.07 percent at 381.68 points with no clear set trend across the major trading centres.

The lira crisis, which has sent shockwaves through emerging markets and beyond, is still a major concern among investors.

"To declare with confidence that the worst is over for the lira, the central bank would have to act decisively (...), diplomatic tension with the U.S. would have to ease and prudent fiscal measures and structural reforms would have to be swiftly implemented," Rabobank analysts said in a note.

Among key movers was Italy's Atlantia (MI:ATL), up about 6 percent after losing up to 25 percent in the previous session in the aftermath of the collapse of a road bridge in Genoa. Atlantia is the parent company of the toll-road operator.

A.P. Moller-Maersk's (CO:MAERSKb) decision to spin off Maersk Drilling and distribute to its shareholders a "material part" of its remaining shares in French oil major Total (PA:TOTF) was welcomed by investors and shares in the Danish shipping company were up 3 percent.

Dutch oil and chemical storage firm Vopak (AS:VOPA) announced lower than expected core profit and lost more than 5 percent.

Still in the Netherlands, speciality chemicals IMCD (AS:IMCD) rose 6 percent to hit an all-time high of 65.30 euros after reporting strong growth in first-half profits.

Air France KLM (PA:AIRF) was down about 3 percent with unions struggling to accept the appointment of its first foreign CEO, Canadian national Ben Smith.

"This has already proved controversial with the French unions, but we understand he has the clear backing of the French state, which remains the largest shareholder," Liberum analysts said in a note.

Traders cited a negative note by Societe Generale (PA:SOGN), which has "sell" rating on the airline, to explain the downward move.

A day after Reuters reported that at least three consortiums have been formed to launch multibillion-euro bids for a state-owned stake in ADP (PA:ADP), shares in the operator of Paris Charles de Gaulle and Orly airports, were up 2.9 percent, at the top of the SBF 120 (SBF120) index.

The tech sector (SX8P) was the biggest laggard, down 0.3 percent after U.S. Applied Materials (O:AMAT), the world's largest supplier of equipment used to make chips, forecast current-quarter profit and revenue below Wall Street estimates.

© Reuters. Traders from BGC, a global brokerage company in London's Canary Wharf financial centre react as European stock markets open

Infineon (DE:IFXGn) Siltronic (DE:WAFGn), AMS (S:AMS) and STMicro (MI:STM) fell by between 1.3 percent and 2 percent.

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