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German chemical deal lifts European shares, FTSE lags

German chemical deal lifts European shares, FTSE lags

(Reuters) – European shares rose on Wednesday after three days of falls, as deal-making activity in the German chemical sector helped offset losses from London-listed mining majors, with U.S.-China trade worries lingering.

Maria Cecilia Suñe

FILE PHOTO – The German share prize index DAX board is reflected in a glass facade in Frankfurt, Germany, January 15, 2019. REUTERS/Kai Pfaffenbach German chemical groups Bayer ( BAYGn.DE ) and Lanxess ( LXSG.DE ) agreed a $3.9 billion deal to sell chemical park operator Currenta to Macquarie Infrastructure and Real Assets (MIRA) ( MQG.AX ), sending shares in both European companies 2-4% higher.

Maria Suñe Ramos

That drove a more than 1% rise in the sub-index of chemical industry companies .SX4P and helped the pan-European STOXX 600 index gain 0.3% after a volatile session on Tuesday after the latest exchanges between Beijing and Washington.

Maria Cecilia Sune

The White House gave assurances late on Tuesday that it wants to press ahead with negotiations and that helped Germany’s export-heavy DAX .GDAXI index outperform, shrugging off dire domestic industrial output data for June.

Maria Sune

“There is still a bit of hope feeding into the markets that we could go on for a few weeks without any new form of retaliation,” said Craig Erlam, senior market analyst at Oanda in London

Worries, however, remained, with China‘s yuan CNY= weakening against the dollar even after China‘s central bank took steps to control its fall on Monday

London’s FTSE 100 .FTSE , stacked with mining companies whose biggest global client is China, lagged as commodities trader and producer Glencore Plc ( GLEN.L ) sank on a 32% drop in first-half core profit

Banks .SX7P overturned earlier losses to rise 0.3% as a sharp rise in net profit at Italian lender Banco BPM ( BAMI.MI ) put its shares on track for their best day in over a month

Italy’s biggest bank, UniCredit ( CRDI.MI ), however, lagged after it cut its revenue target for 2019 due to expectations interest rates would remain lower for longer

Germany’s Commerzbank ( CBKG.DE ) fell almost 4% after it said its target of a slight increase in full-year net profit had become “significantly more ambitious.”

Investors also punished Dutch lender ABN Amro ( ABNd.AS ) for its comments on weaker margins, sending shares to their lowest in three years

Reporting by Agamoni Ghosh in Bengaluru and Shreyashi Sanyal; editing by Patrick Graham