Monday 19 February 2018

Clothing firm H&M jumps 6.7pc as European shares hold steady

Swedish fashion retailer Hennes & Mauritz posted forecast-beating results for its fiscal third quarter
Swedish fashion retailer Hennes & Mauritz posted forecast-beating results for its fiscal third quarter

European shares held firm on Thursday, with retailer H&M a big gainer on robust earnings.

Swedish fashion firm Hennes & Mauritz led the gainers across Europe, jumping 6.7pc after posting a bigger rise than expected in pretax profit for its fiscal third quarter.

H&M has sales outlets in 43 countries, including Ireland, and employs around 94,000 people.

The budget impasse in Washington and a looming battle over the U.S. debt ceiling, however, kept investors on edge.

The FTSEurofirst 300 was flat at 1,256.53 points. The euro zone's blue-chip Euro STOXX 50, meanwhile, edged down 0.1pc to 2,924.39 points.

Indexes were seen remaining stuck within their recent ranges given the fiscal issues that Washington faces.

Before October 1, the U.S. Congress needs to pass stop-gap funding for federal agencies, and by October 17 it must raise the federal borrowing limit to all for needed borrowing.

Congress is currently struggling to pass the spending bill, while Treasury Secretary Jack Lew said the government would not be able to borrow funds past October 17 if no deal on the debt ceiling is reached.

"If we get some progress on Washington, that might prompt a little bit of a rally, but we're in drift mode, and I think that's going to carry on certainly into the weekend," Ian Williams, equity strategist at Peel Hunt said.

"I suspect something will be fixed in time but it's just enough to weigh on sentiment."

While the Euro STOXX 50 edged lower on Thursday, Barclays Capital technical analyst Lynnden Branigan was relatively upbeat on the index, given it has found a base over the 2,900 area.

He reckoned a near-term move back up towards last week's highs of 2,955 was plausible, though would need to see a clear break above this level before becoming more optimistic.

Reuters

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