European stocks closed higher on Monday, boosted by a round of well-received earnings reports and an advance for heavyweight Nestlé after the consumer goods giant announced a deal to sell Starbucks products world-wide.
A weaker euro after disappointing German data also helped give a lift to the region’s exporters.
French stocks, however, underperformed the wider markets as Air-France-KLM shares tumbled after the group’s chief executive resigned over the weekend amid a dispute over staff salaries.
What are markets doing?
The Stoxx Europe 600 index SXXP, +0.64% rose 0.6% to end at 389.50, closing at its highest level since Feb. 1, according to FactSet data. On Friday the pan-European index scored a sixth straight weekly gain, its longest run of winning weeks since March 2015.
Germany’s DAX 30 index DAX, +1.00% added 1% to 12,948.14, while France’s CAC 40 index PX1, +0.28% rose 0.3% to 5,531.42, weighed by Air France-KLM AF, -9.83% .
U.K. markets UKX, +0.86% were closed for a bank holiday.
The euro EURUSD, +0.0168% dropped to $1.1919 from $1.1963 late Friday in New York. A weaker euro tends to give European markets a boost as many of the region’s companies make the bulk of their revenue overseas.
What are driving markets?
With U.K. markets closed for a holiday, trading was light across the European markets. There were no major economic releases on deck, so traders instead focused on corporate news from some of the region’s biggest companies.
Nestlé SA NESN, +1.57% NSRGY, +1.38% rose 1.6% after news the Swiss food giant is joining forces with Starbucks Corp. SBUX, -0.40% and entered into a deal to market the coffee chain’s products globally in supermarkets, restaurants and catering operations.
On a more downbeat note, shares of Air France-KLM AF, -9.83% plunged 9.8% as a conflict over workers’ pay escalated. CEO Jean-Marc Janaillac resigned over the weekend after staff on Friday rejected a pay deal, raising concerns over the future of the often strike-hit airline. French Finance Minister Bruno Le Maire said in a Sunday interview that Air France-KLM is at risk of “disappearing” if it doesn’t make the efforts needed to compete.
What are strategists saying?
“Unions rejecting his pay deal means Jean-Marc Janaillac has failed to get the job done on soothing labor relations. And as he promised he has stepped aside to give somebody else a shot. We are not hopeful his successor will have much more luck,” said Jasper Lawler, head of research at London Capital Group, in a note.
“The choice is binary for the airline’s next boss; pay higher wages or face more revenue-destroying strikes and flight cancellations,” he added.
What’s new in economics?
German manufacturing orders unexpectedly dropped in March, falling by 0.9% month-on-month. Economists polled by The Wall Street Journal had forecast an increase of 0.5%.
Which other stocks are in focus?
Shares of Ambu A/S AMBUB, +17.88% rallied 18% after the Danish health-care equipment maker raised its full-year outlook for organic growth.
Aker BP ASA AKERBP, +8.68% climbed 8.7% after the Norwegian oil company released earnings that beat forecasts.
Nokia Corp. NOKIA, +2.79% NOK, +1.48% gained 2.8% after the Finnish company said it has acquired SpaceTime Insight to “its Internet of Things (IoT) portfolio.”
