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European stocks traded higher on Thursday, with retailers standing out with gains, while shares of BT Group tumbled on news of a tie-up between Liberty Global and Spain’s Telefónica.
The Stoxx Europe 600 index SXXP, +0.79% rose 0.5% to 335.86 after a 0.3% loss on Wednesday. The German DAX DAX, +1.09% gained 0.7% and the French CAC 40 index PX1, +0.81% added 0.5%.
The FTSE 100 index UKX, +0.83% rose 0.3%, kept in check by a 0.3% rise for the pound against the dollar GBPUSD, +0.17% after the Bank of England left key rates and its bond-buying program unchanged in an announcement ahead of the market open. The central bank warned that the British economy could shrink by 30% in the first half of the year due to the pandemic.
Investors have been buying global equities since the March rout on hopes of a recovery later this year, though corporate updates and persistent downbeat data indicate that may be a stretch as countries slowly try to reopen economies. Data out on Thursday showed German and French industrial production collapsing in March.
More jobs data from the U.S. is ahead, with another 3 million Americans expected to have applied for unemployment benefits in the latest week, adding to a record 30 million. That comes a day before what is expected to be a grim nonfarm payrolls report. But Dow futures YM00, +1.32% indicated a higher start for Thursday, up 248 points to 23,761.
Amid concerns of rising U.S.-China tensions, top trade negotiators Robert Lighthizer and Liu He could be speaking trade between the countries as early as next week, Bloomberg News reported, citing sources.
The corporate front was busy with Europe’s first major deal since the pandemic began. Shares of Telefónica TEF, -3.32% TEF, -0.16% rose nearly 1% after the Spanish telecom and U.S. tycoon John Malone’s cable group Liberty Global LBTYA, -2.59% agreed to merge their U.K. operations — O2 and Virgin Media — in a 50-50 joint venture.
Shares of BT Group BT.A, -8.31% came under pressure on that deal news, and after the telecom said it would suspend its dividend until 2022 to fund a restructuring plan and deal with the pandemic.
The retail sector was a bright spot, with shares of Zalando ZAL, +8.87% up 13% after the European e-commerce retailer reported first-quarter sales growth of 10.6%, which was sharply lower than the prior year, but it said it expected a more upbeat second quarter.
Shares of Puma PUM, +4.90% rose 3% after the German-based sportswear maker reported a pandemic-driven earnings hit in the first quarter and warned of worse to come in the second. But it also reported better-than-expected sales, with the online side jumping 40%. Elsewhere, JD Sports Fashion JD, +6.13% gained 4%.
Shares of Air France-KLM AF, -4.11% dropped over 3% after the airline warned of a hard second quarter to come, after posting a widening loss in the first quarter. It spoke of a “high level of uncertainty on the duration of the COVID-19 crisis and impact on the macroeconomic environment,” in a press release.
Anheuser-Busch InBev BUD, +2.74% ABI, +2.61% shares rose nearly 3%. The world’s largest brewer swung to a net loss in the first quarter, and said it expected falling volumes to worsen in the second quarter. However, analysts cheered moves by the company to mitigate costs.
