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UPDATE 2-European shares rally as trade optimism outweighs political concerns

Published 26/09/2019, 17:32
© Reuters.  UPDATE 2-European shares rally as trade optimism outweighs political concerns
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(For a live blog on European stocks, type LIVE/ in an Eikon

news window)

* China in close touch with U.S. for Oct trade talks

* Imperial Brands, Pearson , Carnival slide on profit

warnings

* Healthcare stocks jump after Moody's report

(Adds fresh comment, updates prices to close)

By Susan Mathew

Sept 26 (Reuters) - European shares saw broad-based gains on

Thursday, rallying after encouraging comments from China on

trade with the United States came as a welcome relief amid

growth worries and political turmoil.

The optimism seemed to outweigh concerns about impeachment

surrounding U.S. President Donald Trump which pushed Wall Street

into the red. London's blue-chip index .FTSE jumped 0.8%

percent despite heavy falls in some stocks. .N .L

The pan-European STOXX 600 index .STOXX closed up 0.6%,

after weak purchasing managers' surveys, worries about Britain's

exit from the European Union and the impeachment probe into

Trump had pressured the index over the last three sessions.

"What we see is just market expectations, it is purely micro

management of the market," said Stephane Barbier de la Serre,

Macro Strategist, Makor Capital Markets SA.

"They sold yesterday and they are buying back. It is very

much algorithm trading."

Trade optimism was spurred by Beijing saying it's in close

communication with Washington and preparing to make progress at

trade talks in October. This came after Trump's overnight

comment that a Sino-U.S. trade deal could happen sooner than

expected.

Although investors are keeping a close watch on U.S.-China

trade moves, they are starting to price in the possibility of

trade negotiations continuing for a long time, and are nearing

the point of growing immune to developments on this front,

analysts say.

"If none of the external shocks hitting global manufacturing

and trade get much worse than it is already, households and

companies are likely to get used to the noise and risks over

time," wrote Holger Schmieding, chief economist at Berenberg.

Healthcare stocks were among the biggest gainers on the day

after rating agency Moody's said drugmakers with a major

presence in China would benefit from the country's growing

demand for drugs. AstraZeneca Plc AZN.L , Novartis NOVN.S and Roche Holding

AG ROG.S rose between 0.7% and 1.5%.

Belgian supermarket chain Colruyt COLR.BR jumped 7.6%

after a better than expected net income forecast. Some London-listed stocks saw steep declines after issuing

profit warnings. Education company Pearson PSON.L and tobacco

company Imperial Brands IMB.L both dropped more than 12%,

while cruise operator Carnival Corp CCL.L gave up 7.2%.

Dutch bank ABN Amro ABNd.AS was also among the biggest

drags on the pan-region index, hit by a money laundering

investigation.

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