European markets mostly higher amid trade optimism; UK court rules parliament suspension ‘unlawful’


European markets traded mostly higher on Tuesday as traders monitor the latest U.S.-China trade developments.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European Stoxx 600 edged 0.25% higher during morning trade, healthcare and utilities stocks each adding 0.8% to lead gains while autos shed 0.5%.

In landmark case on Tuesday, the U.K.’s highest court ruled that Prime Minister Boris Johnson’s suspension of parliament for five weeks until October 14 was unlawful. Sterling jumped nearly 0.40% upon the decision but slipped back to trade around 0.23% higher at $1.2455 shortly afterwards.

The Supreme Court also determined that the prorogation of parliament was null and void and said the speakers of both parliamentary houses must now decide what to do next.

Going into Tuesday’s session, traders were largely focused on news around the U.S.-China trade spat. Treasury Secretary Steven Mnuchin said on Monday that talks between Washington and Beijing would resume in two weeks.

The U.S. finance official appeared to be contradicted publicly by President Donald Trump earlier in the day. Mnuchin said that last week’s visit from Chinese officials had been cut short on the request of U.S. officials, to which Trump responded “why?”

In Asia, markets were in mixed territory amid weak Japanese manufacturing data. A key index showed the country’s factory activity shrank at its fastest pace in seven months in September.

In corporate news, Belgian brewer Anheuser-Busch InBev priced the initial public offering of its Asian business at HK$27 a share, the bottom of an indicative range, sources told CNBC. The move means the firm will raise up to $5 billion in the float.

On the data front, Germany’s Ifo business climate index offered a slight improvement Tuesday morning, rising to 94.6 points from 94.3 points in August. However, companies’ expectations fell to 90.8 points from 91.3 points in August, hitting its lowest level since June 2009.

Stocks on the move

The biggest winner in the Stoxx 600 was Belgian materials technology company Umicore, which gained 8.2% after announcing a supply deal with LG Chem.

German drug company Evotec climbed 6% after announcing a strategic drug discovery collaboration with Takeda.

At the other end of the European blue chip index, asset manager Investec slid 4.5% amid challenging market conditions and an anticipated fall in profits for the six months up to the end of September.

K+S shares fell 4.2% after the German chemicals company issued a profit warning on Monday, prompting various brokers to cut their price targets for the stock.

Royal Mail shares were down 3.6% after Liberum downgraded the company’s stock to sell.