European shares rise on trade optimism; Michelin inflates tyre makers, autos

  • Reuters
  • Stock Market News
European shares rise on trade optimism; Michelin inflates tyre makers, autos
Credit: © Reuters.

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* Plus500 sinks after profit warning

* Michelin set for best day in nearly a decade after results

* Gucci owner Kering falls

LONDON, Feb 12 (Reuters) - European shares opened higher on Tuesday as investors cheered signs of a compromise in the standoff over the U.S. government funding and positive signals around U.S.-China trade talks, while Michelin's results pumped up tyre stocks.

The pan-European STOXX 600 .STOXX was up 0.6 percent at 0841 GMT, with Germany's trade-sensitive DAX GDAXI up 1.2 percent and Paris' CAC 40 .FCHI up 0.7 percent.

Automakers and their suppliers .SXAP were the biggest gainers, up 2.2 percent after Michelin MICP.PA delivered better-than-expected results and pledged further gains in operating profit this year despite challenging conditions.

The French tyre maker's shares rallied more than 10 percent and were on track for their best day in nearly a decade.

Italy's Pirelli PIRC.MI and Germany's Continental CONG.DE topped the leader board in their domestic markets and were among the biggest gainers on the STOXX 600.

In a sign of the high expectations for luxury brand earnings following solid numbers from the sector, including LVMH last week, Gucci owner Kering PRTP.PA fell even after its better-than-expected sales and upbeat comments about Chinese demand.

Investors questioned whether the results were as solid in China as its rivals and Citigroup (NYSE: C ) analysts said the numbers might not be enough to please demanding market expectations. The shares were down 3.3 percent.

Thyssenkrupp TKAG.DE shares fell 2.6 percent after its mixed report. The German steel-to-elevator maker stood by its 2018/19 targets, but warned the global economic environment is darkening after reporting a big drop in first-quarter results.

Investors continued to punish TUI TUIGn.DE as the tour operator reported a widening loss in its quarter to end-December. That follows its profit warning last week.

Online trading platform Plus500 PLUSP.L lost more than a third of its value after the company issued a profit and revenue warning, blaming tightening EU regulation on its retail business. The news dragged peer IG IGG.L with it.

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