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UPDATE 2-European shares hold four-year peak, creep towards record highs

Published 2019/11/06, 19:34
© Reuters.  UPDATE 2-European shares hold four-year peak, creep towards record highs

* STOXX 600 creep towards record highs

* Soc-Gen hits 6-month high on capital buffer boost

* Telecoms emerge as worst YTD performers

(Recasts, updates to close, changes quote)

By Agamoni Ghosh and Susan Mathew

Nov 6 (Reuters) - European stocks scaled a fresh four-year peak on Wednesday driven by a surge in shares of consumer-focused companies that helped offset declines in autos and miners, while investors awaited new developments from U.S.-China trade talks.

The pan-European STOXX 600 index .STOXX closed 0.2% higher and was about 2% away from reclaiming its record high level, hit last in April 2015.

European shares have logged strong gains this week on growing optimism over a trade truce between the United States and China. But minutes after the market closing bell struck, a Reuters report cited sources to say that a Phase-1 deal could be delayed until December. the good news regarding trade has also been largely priced in, so if the rumors prove to be wrong the risk to the potential downside are actually far bigger," said Simona Gambarini, markets economist at Capital Economics in London.

"We no longer expect a correction in equities but do think there aren't too many reasons to be positive given we are already close to record levels and economic data is still poor with earnings growth weaker than in the past few years."

Gains on the benchmark index were led by food and beverage .SX3P as well as the retail sector .SXRP with some earnings to digest.

Ahold Delhaize AD.AS emerged as the top gainer on the STOXX 600 after the Dutch supermarket operator reported upbeat third-quarter results, citing strong sales in its Food Lion and Hannaford chains in the U.S. 4% rise in shares of Brenntag BNRGn.DE boosted the chemicals sub-sector .SX4P after the German distributor posted better-than-expected third-quarter profits.

Adidas ADSGn.DE was among the few disappointments, down 5% after the German sportswear company said its third-quarter growth was held back by a weaker performance from Yeezy shoes designed by Kanye West. the main drags, car makers .SXAP fell 0.3% with BMW's better-than-expected third-quarter results doing little to cheer up the sector, while commodity-linked stocks .SXPP fell for the first time in three sessions.

Banks .SX7P ended flat after rallying as much as 1% earlier in the day after French lender Societe Generale SOGN.PA raised its capital ratio despite a profit fall in the third-quarter and on hopes that a new banking reform may soon take shape for the euro trading bloc.

European banks which closed at their highest levels since May are up 6% year-to-date, leaving to Telecoms .SXKP the trophy of worst performing sector, up less than 5% this year.

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