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23 Oct 2020 | 17:13

Europe close: Stocks push higher, UK lenders pace advance

(Sharecast News) - European shares pushed ahead at the end of the week, helped by better-than-expected third quarter earnings from Britain's Barclays bank and upbeat earnings news from continental car makers. The pan-European Stoxx 600 index was up 0.49% at 362.03, with London's FTSE 100 1.29% higher to 5,860.28, Germany's DAX ahead by 0.82% to 12,645.75 and the French CAC 40 up by 0.49% at 4,909.64.

Investors were looking for any positives after a week of rising coronavirus cases and tightening restrictions, although caution was evident on Wall Street what with the US election just 12 days away.

Barclays shares were up almost 7% as the lender posted a pre-tax profit £1.1bn for the three months to September, compared with £200m a year ago and double analysts' forecasts.

Other banks followed suit, with Lloyds, HSBC, NatWest and Standard Chartered advanced alongside, with all, aside from the latter, scheduled to update their investors during the following week.

Combined, UK lenders sent the Stoxx 600 sector index 2.82% higher.

UK sentiment was also boosted by data showing retail sales rose in September for the fifth consecutive month as they continue to recover from the Covid-19 slump. Sales increased 1.5% on the month in September, beating expectations for a 0.4% increase.

In the Euro zone economic activity fell back into decline this month as the coronavirus pandemic hammered in the service industry sector and offset improvements in manufacturing.

IHS Markit's flash Composite Purchasing Managers' Index fell to a four-month-low of 49.4 in October from September's final reading of 50.4, below the 50-mark separating growth from contraction.

The service industry's PMI fell to 46.2 from 48.0, below expectations for a drop to 47.0.

"The euro zone is at increased risk of falling into a double-dip downturn as a second wave of virus infections led to a renewed fall in business activity," said IHS Markit chief economist Chris Williamson.

In other equity news, shares in car maker Daimler rose as the firm raised its 2020 profit outlook, while Renault stock was also up after the French manufacturer said it should have positive cash flow from cars by the end of 2020 as sales recovered.

To take note of, the European Central Bank was expected to meet to decide on policy on 29 October.

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