European shares hit 5-month high on trade war resolution hopes

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Credit: Shutterstock photo

* STOXX 600 up 0.2 pct

* BA owner falls on cash flow guidance

* Money laundering claims hit Nordea shares

By Julien Ponthus and Danilo Masoni

LONDON, March 4 (Reuters) - European shares hit five-monthhighs on Monday with cyclical stocks outperforming defensives,helped by hopes over a deal to end the U.S.-Sino trade war.

The pan-regional STOXX 600 .STOXX index rose as much as0.6 percent during the session to its highest level since Oct. 5before paring some gains and ending up 0.2 percent on the day.

U.S. President Donald Trump and Chinese President Xi Jinpingcould reach a formal trade deal at a summit around March 27given progress in talks between the two countries, the WallStreet Journal reported on Sunday.

"A deal between the two biggest economies would end theclimate of uncertainty which has been detrimental for assetsperceived as riskier, such as stocks," ActivTrades analystPierre Veyret said.

"However, traders have already priced in a potentialagreement and this might increase the downside risks as manyabide to the rule: 'buy the rumour, sell the news'," he added.

The STOXX 600 is up more than 11 percent so far this yearand a Reuters poll last week has shown investors expect theindex to end the year near its current levels.

Further weighing towards the end of the session wasweaker-than-expected construction data from the United Statesthat pushed Wall Street into negative territory.

Among top movers in Europe on Monday were shares in IAG ICAG.L , which hit a two-month low after the owner of BritishAirways and Iberia issued a clarification to say its 2019 freecash flow would be lower than last year.

Its shares fell 4.8 percent, leading fallers on the STOXX.

Shares in Nordea NDAFI.HE , the Nordic region's largestbank, fell 3.5 percent on allegations of money laundering aired on Monday by Finnish broadcaster Yle.

According to Yle, Nordea handled some 700 million euros($790 million) in suspicious transactions between 2005 and 2017.

Nordea said it had no immediate comment.

Ted BakerTED.L ended higher after Ray Kelvin resigned aschief executive of the fashion retailer, seeking to allow thefashion brand he founded to move on from misconduct allegationsstemming from his habit of hugging colleagues.

Elsewhere, Britain'sRotorkROR.L fell 3.5 percent afterdisappointing earnings, while Swiss utility AlpiqALPH.S shed1.3 percent after reporting its fourth annual loss in five yearsas its hydropower and nuclear facilities again struggled.

Among top gainers were the shares of publisher Daily Mail &General TrustDMGOa.L , which jumped 4.5 percent afterannouncing plans to return all of its shares in EuromoneyInstitutional Investor ERM.L and 200 million pounds ($265million) cash to eligible shareholders.

French perfumes maker InterparfumsIPAR.PA rose 4.4percent after raising its full-year revenue guidance following astrong start to the year.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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