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European stocks inch higher, banks slide after HSBC warning

imageStock Markets10 hours ago (Aug 03, 2020 03:35AM ET)

(C) Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

(Reuters) – European shares inched higher on Monday as German stocks outperformed on the back of improving Chinese manufacturing data, but a warning from Europe’s biggest lender HSBC over rising bad loans sent banking stocks lower.

The pan-European STOXX 600 index (STOXX) were up 0.1% at 0714 GMT, with technology (SX8P), automakers (SXAP) and oil & gas firms (SXEP) leading the gains.

The exporter-heavy German bourse (GDAXI) gained 0.6% after a private sector survey showed manufacturing activity in China expanded at the fastest pace in nearly a decade as domestic demand improved.

Euro zone manufacturing PMI data are scheduled for release at 0800 GMT.

However, the gains were capped as U.S. lawmkers were divided over another coronavirus stimulus package, while worries remained about a further tightening of restrictions in Europe as COVID-19 cases rose.

Banking stocks (SX7P) took a hit as HSBC (L:HSBA) dropped 4.4% after its half-yearly profits more than halved and the lender warned its bad debt charges could blow past a previous estimate to $13 billion this year.

France’s Societe Generale (PA:SOGN) also declined 2.3% as it reported a 1.26 billion euro ($1.48 billion) second-quarter loss after booking a writedown on the value of its trading business.

Siemens Healthineers (DE:SHLG) was down 4.8% after the German health group said it was buying U.S. firm Varian Medical Systems (N:VAR) for $16.4 billion.

European stocks inch higher, banks slide after HSBC warning

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