U.S. Markets closed

European shares end higher boosted by banks and auto stocks

FILE PHOTO: Styrofoam bull figures stand on a counter on the trading floor at the stock exchange in Frankfurt, Germany January 7, 2016. REUTERS/Kai Pfaffenbach

By Susan Mathew

(Reuters) - European shares finished higher for a third straight day on Friday, with investor sentiment getting a boost from JP Morgan setting a strong start to U.S. earnings and amid signs of stabilization in China's economy.

The pan-European STOXX 600 index closed up 0.16 percent, but ended the week lower after two weeks of gains. Banks and the auto sector were the biggest boosts to the benchmark on the day.

Italy's MIB led gains in the region with its 0.8 percent rise, having hit an eight-month high earlier the session, while German shares closed up 0.5 percent.

Data showed that China's exports rebounded to a five-month high in March, but imports shrank for a fourth straight month and at a faster pace, painting a mixed picture of the economy.

"The markets seems to have shaken off the negative aspects of the Chinese trade data, but it's a minor rise at the end of a fairly limp week," said Connor Campbell, an analyst at Spreadex.

Banks got a boost after shares of the largest U.S. bank by assets rose after the company beat quarterly profit estimates, easing fears that slowing economic growth could weigh on its results.

Regional lenders, such as StanChart, Deutsche Bank, BNP Paribas and Credit Suisse rallied, taking the European bank index up 1.9 percent to a five-month high.

HSBC was among the biggest driver of gains on the pan-region benchmark. The firm said it so far moved only a "tiny" number of jobs to Paris in order to deal with Brexit..

Italy's biggest bank, UniCredit rose more than 4 percent even after it said is one of the banks accused of running a cartel in trading euro zone government bonds between 2007 and 2012, when financial crises dragged down banks and several European economies.

The auto sector followed suit with car-makers such BMW, Daimler and Fiat Chrysler gaining more than 2.2 percent each.

Amid warnings that proposed U.S. automotive tariffs could do more damage to global growth than the ongoing U.S.-China trade dispute, BAML analysts point to a lack of action out of the U.S. on threatened auto tariffs.

"In our view, the reluctance to move forward is because actually imposing auto tariffs would be both deeply unpopular and a major shock to the equity markets."

Basic resources stocks also gained with iron ore and copper prices on the rise. Rio Tinto and Glencore were among top boosts to Britain's blue-chip index higher.

Airbus gained as its new chief executive, Guillaume Faury, imposed a simplified management structure and a manifesto for factory modernisation.

GN Store Nord rose 7.8 percent after the Danish audio-maker raised financial guidance. Medical technology supplier Carl Zeiss climbed 6.6 percent on strong full-year guidance.

Swiss train and carriage manufacturer Stadler Rail jumped 13.4 percent after its debut on the SIX Swiss Exchange.

On the other hand, London-based online trading platform Plus500 tumbled 31.2 percent as revenue for the first quarter dropped to around a fifth of last year's, hurt by a fall in trading volumes.

(This story corrects country of index in paragraph 3 to say Italy's MIB, not Spain's MIB)


(Reporting by Medha Singh and Agamoni Ghosh and Susan Mathew in Bengaluru, editing by Larry King)