European shares surf on post-Christmas recovery rally

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The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 10, 2019. REUTERS/Staff

LONDON (Reuters) – European shares opened higher on Friday, surfing on a global recovery rally which has lifted stocks from the lows hit just after Christmas thanks to optimism on Sino-U.S. trade talks and a more dovish tone from the Federal Reserve.

The pan-European STOXX 600 (STOXX) rose 0.1 percent at the open to reach a one-month high, with most regional bourses and industrial sectors in positive territory.

Pharmaceutical group Orion Oyj (HE:ORNBV) fell 6.5 percent after its rating was cut to “underperform” by Jefferies which argued the current dividend yield was not enough to support the share price.

In the telecoms sector, talk of possible consolidations in France lifted shares in Altice Europe (AS:ATCA) about 5 percent, and Iliad (PA:ILD) 1.2 percent.

France’s incumbent operator Orange (PA:ORAN), which would benefit from less competition on its home turf, led the European telecom index (SXKP) with a 1.2 percent rise.

French utilities took a hit after Societe Generale (PA:SOGN) downgraded ratings on Suez (PA:SEVI) and Veolia Environnement (PA:VIE) citing doubts about the global growth outlook.

The stocks were down 2.7 percent and 1.7 percent respectively.