European shares were trading higher in the early afternoon Friday, as investors were buoyed by news of a breakthrough in governing coalition talks in Germany. Deals news was also influential and sent some stocks lower, while others surged.
By 1320 BST, the EUROSTOXX 600 was trading 0.08% higher and the EUROSTOXX was 0.24% in the green.
Regional bourses were a little mixed, with the German DAX giving up earlier gains to trade 0.04% lower. The French CAC, meanwhile, was up 0.28% and the Spanish IBEX was 0.39% in positive territory.
German Government talks success
Investor sentiment was buoyed by news of a breakthrough in German governing coalition talks, earlier Friday.
German Chancellor Angela Merkel achieved an agreement with the Social Democrat, SPD party to begin government coalition talks. The deal follows months of uncertainty since initial talks following the 2017 election collapsed.
While the agreement to begin talks isn’t a conclusive agreement to govern together, it does mark a significant step forward in the process. If the two parties can agree to another ‘grand coalition’ as has been in place since 2013, it must be approved at the SDP’s congress on January 21.
The German elections took place in September and although Merkel retains the leadership of the country’s government, she requires a coalition partner who will support her through key decisions.
Investor’s focus hasn’t all been on German politics. Some deals news earlier in the session also drew their attention.
Puma shares moved lower as its majority shareholder, Kering Group, announced plans to exit ownership through a share redistribution strategy. Puma expressed pleasure at the news and said it was happy that more of its stock would be tradable on the stock exchange. Puma shares fell some 6.21% to €317.00.
GKN shares gained, meanwhile, as the automotive parts firm rejected an ‘opportunistic’ bid from rival Melrose. GKN shares were 27.17% higher at £430.10.
The GKN news also helped boost the wider autos sector.