- STOXX 600 inches up
- Air France down 13 pct on management turmoil
- Nestle gains after Starbucks deal
- Strong updates boost Ambu, Aker, Hannover R
European shares were supported on Monday by some good earning updates and gains in Nestle after the Swiss-based food giant agreed a tie-up with Starbucks. .
A 13 percent drop in Air France on management turmoil and weakness among banks weighed, however, keeping the pan-European STOXX 600 index up only 0.1 percent, while UK markets were closed for a public holiday, reducing activity.
Nestle rose 0.5 percent after news it will pay $7.15 billion as part of a global coffee alliance in which the food group is getting the rights to market Starbucks products around the world outside U.S. coffee company’s shops.
“The Starbucks licensing agreement paves the way for Nestle to significantly expand its position in the coffee business. At first glance, the deal looks strategically key, also because Nestle is forging ahead in one of the most important growth categories,” said ZKB analysts in a note.
Air France tumbled to a one-year low after its CEO Jean-Marc Janaillac said on Friday he would resign after staff rejected a pay deal, plunging the airline into turmoil amid a wave of strikes that has cost the company 300 million euros.
Traders said brokers were downgrading the stock while Bernstein analysts said that was the worst possible outcome for the airline carrier.
“This leaves the company with no CEO, no labor contract, an ongoing dispute, and likely emboldened unions which will be even less likely to concede on their demands, now,” they said.
Over the weekend, the French government urged Air France managers and unions to resolve the stand-off.
Shares in German carrier Lufthansa rose 0.5 percent.
In earnings news, shares in Ambu rose 12.8 percent to a record high after the Danish healthcare equipment maker raised its outlook.
Forecast-beating quarterly earnings lifted Norway-focused independent oil company Aker BP up 8 percent, as its sector was underpinned by a surge in crude oil prices to late-2014 peaks.
Hannover RE rose 2.7 percent, hitting a fresh all-time high, after the insurance group raised its guidance for 2018 gross premiums.
Banks were the biggest sectoral loser in Europe, down 0.4 percent, led by declines of more than 1 percent in French lenders Societe Generale and BNP, which extended Friday’s heavy losses triggered by disappointing updates.