European stocks closed slightly higher on Wednesday, reversing earlier losses suffered after Iran fired missiles on Iraqi airbases housing U.S. troops.
The pan-European Stoxx 600 was around 0.1% higher at the closing bell, with travel and leisure stocks adding 0.6% to lead gains while food and beverages slipped 0.6%.
Markets in Europe got off to a rocky start after Tehran retaliated to Washington’s killing of its top military commander, launching more than a dozen ballistic missiles targeted at U.S. military forces in Iraq. It was not immediately clear whether any U.S. service members were harmed in the attacks.
However, market participants seemed to interpret the action as a contained response to the targeted killing of Qasem Soleimani, with fears of an escalation easing somewhat during Wednesday’s trading session.
Iranian Foreign Minister Mohamad Javad Zarif said via Twitter that “we do not seek escalation or war, but will defend ourselves against any aggression.”
“All is well!” President Donald Trump tweeted, adding that an assessment of casualties was taking place.
Back in Europe, British Prime Minister Boris Johnson is meeting with European Commission President Ursula von der Leyen Wednesday, where he is due to tell her that the U.K. will not extend its transition out of the EU beyond Dec. 2020.
In corporate news, Sainsbury’s reported a weak Christmas quarter before the bell, attributing a drop in like-for-like sales to poor demand for general merchandise while emphasizing solid food sales. The British supermarket chain’s stock was 1.6% lower at the end of Wednesday’s session.
As for data, German factory orders fell unexpectedly in November on the back of weak foreign demand, according to figures published Wednesday morning.
However, data published Wednesday by economic institutes Ifo in Munich, KOF in Zurich and Istat in Rome suggested that the euro zone economy is gaining momentum. The Ifo Institute said that economic growth will rise to 0.3% in the fourth quarter of 2019 from 0.2% in the previous quarter.
The research groups anticipate 0.3% quarter-on-quarter growth in each of the first two quarters of 2020, with industrial production and investment also gathering pace.
Stocks on the move
Shares of London-listed NMC Health plunged almost 16% after two investors sold their stakes in the company. The Abu Dhabi-based hospital chain has been embroiled in a protracted dispute with activist short-seller Muddy Waters over its accounting practices.
At the top of the European benchmark, video game producer Ubisoft’s shares gained 4.7%.
Italian infrastructure company Atlantia gained 4% on hopes that fresh talks with the government could salvage its motorway concession, according to Reuters.
British manufacturing equipment company Rotork slid 6.3% after Bank of America cut the stock from “buy” to “underperform,” citing limited momentum in 2020.
