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European markets gain as investors watch U.S. stimulus, earnings; Barclays up 7.7%

  • House Speaker Nancy Pelosi signaled that she and Treasury Secretary Steven Mnuchin were “just about there” in discussions over a new coronavirus aid bill.
  • Barclays on Friday reported a net profit of £611 million ($797.7 million) for the third quarter, more than double analyst expectations of £273.5 million, in part due to a sharp reduction in coronavirus-related impairment charges.

LONDON — European markets advanced on Friday as investors monitored signs of progress toward a U.S. stimulus deal and digested a raft of major corporate earnings.

TICKER COMPANY NAME PRICE CHANGE %CHANGE VOLUME 
.FTSEFTSE 100FTSE5860.2874.631.29852798016
.GDAXIDAXDAX12645.75102.690.8255669168
.FCHICAC 40 IndexCAC4909.6458.261.2080388094

The pan-European Stoxx 600 was up 0.9% by mid-afternoon trade, with banks jumping 3% on the back of strong earnings while retail stocks were the only sector in the red, falling 0.5%.

European stocks tracked gains on Wall Street after House Speaker Nancy Pelosi indicated that she and Treasury Secretary Steven Mnuchin were “just about there” in discussions over a new coronavirus aid bill. However, Pelosi cooled anticipation of legislation being in place prior to the Nov. 3 election, suggesting it could be “a while” for the bill to be written and signed.

Markets in Asia were mixed overnight, with Hong Kong’s Hang Seng index cautiously advancing while mainland Chinese shares retreated.

In a breakthrough on the treatment front, the U.S. Food and Drug Administration on Thursday approved Gilead Sciences’ antiviral drug remdesivir as a treatment for Covid-19.

Back in Europe, the U.K. and European Union ramped up daily talks on Thursday as time ticks away for both sides to agree on a post-Brexit trading arrangement.

On the data front, the flash euro zone PMI composite output index, which looks at activity in both manufacturing and services sectors, dropped to a four-month low in October to 49.4, versus 50.4 in September. A reading below 50 represents a contraction in activity.

Earnings in focus

Barclays on Friday reported a net profit of £611 million ($797.7 million) for the third quarter, more than double analyst expectations of £273.5 million, in part due to a sharp reduction in coronavirus-related impairment charges. Barclays shares added 7.7% by the afternoon, leading a broad rally for banks.

Daimler upped its 2020 profit outlook on Friday as strong third-quarter demand in China helped boost margins at its Mercedes-Benz cars division. The German automaker’s shares edged 1.9% higher.

Swedish mining company Epiroc and France’s Elis climbed 7.3% after strong third-quarter results, while Hydro also added more than 6% after its earnings report.

At the bottom of the European blue chip index, Swedish engineering company AF Poyry fell 10% after the pandemic hit third-quarter sales.

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