European shares recover, aided by Volvo, defensive buying - Metro US

European shares recover, aided by Volvo, defensive buying

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, December 17, 2019. REUTERS/Staff
By Sruthi Shankar

By Sruthi Shankar

LONDON (Reuters) – European shares recovered on Wednesday as gains for Swedish truck maker Volvo and defensive sectors offset worries about a hard Brexit that continued to pressure UK mid-cap shares.

The pan-European STOXX 600 <.STOXX> inched up 0.3% to near Monday’s record high, encouraged by a Conservative victory in UK elections and a preliminary U.S.-China trade deal.

Encouraging corporate updates from several large companies helped to drive markets higher.

Shares in Volvo AB gained 3.5% after Japan’s Isuzu Motors <7202.T> agreed to buy Volvo’s UD Trucks business and tie up with Volvo to cut costs and develop electric and self-driving technologies.

British education company Pearson rose 2.9% after agreeing to sell its remaining 25% stake in publisher Penguin Random House to German partner Bertelsmann , generating net proceeds of about $675 million.

Most regional indexes were trading higher. Germany’s DAX <.GDAXI> recovered some losses after the Ifo Institute reported German business morale rose more than expected in December, a sign that a manufacturing crisis in Europe’s largest economy may be bottoming out.

However, domestically focused UK stocks <.FTMC> fell 0.5% amid worries about British Prime Minister Boris Johnson’s taking a hard line on Brexit. London’s exporter-heavy FTSE 100 <.FTSE> rose 0.2% as the pound erased all its from the Tory victory.

“Clearly, Brexit is a big worry and some of the euphoria over the U.S.-China trade deal is wearing off, too,” said IG Markets analyst Chris Beauchamp. “It’s not surprising to see the stocks struggling a bit to get the momentum.”

Defensive sectors such as healthcare, food and beverage and utilities led gains on the main STOXX 600 index.

Among other stocks, Peugeot maker PSA rose 1.5% after Fiat Chrysler and the French carmaker agreed on a binding merger in a $50 billion deal.

Shares in Swedish bank SEB slipped 1.2% after the country’s financial regulator said it had taken its investigation of anti-money laundering controls at its Baltic operations to a new level.

Among losses, Danish luxury TV and stereo maker Bang & Olufsen fell 14.3% after cutting its revenue and operating margin outlook.

Shares in French drugmaker Ipsen , among the worst- performing healthcare stocks on the STOXX 600 this year, fell 3.6% after the company announced the departure of its chief executive officer.

(Reporting by Sruthi Shankar, editing by Larry King)

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