Europe midday: Temenos down on claims by short seller Hindenburg

16th Feb 2024 11:19

(Sharecast News) - European stocks extended gains Friday as investors digested better-than-expected UK retail sales figures and corporate earnings from NatWest Bank and Finland's Metso, while Temenos fell further after an attack by short seller Hindenburg.

The Stoxx 600 index was up 0.49% at 490.95, with all major bourses higher. The UK was in focus politically and economically as the embattled ruling Conservative Party suffered two big by-election defeats to the main opposition Labour Party.

It surrendered the seat of Wellingborough after sitting MP Peter Bone was forced out over allegations of misconduct, while Kingswood, vacated by Chris Skidmore, who reigned in protest at the government's decision to issue more oil and gas exploration licences.

The results suggest that the Tories are heading for a heavy defeat at a General Election which must be called by the end of the year. They are currently trailing Labour by 21 points in the polls.

In Britain, retail sales rose, providing some positive news for a beleaguered economy that went into technical recession on Thursday.

Sales rose 3.4% month on month, according to the Office for National Statistics, far higher than estimates of 1.5% growth and a rebound from a record fall in December.

"These green shoots are encouraging, but we're not totally out of the woods yet. Clothing is still a lag, suggesting consumers are still wary about spending on non-essentials," said Hargreaves Lansdown analyst Sophie Lund-Yates.

"The increase in supermarkets is welcome news though, looser buying behaviour in this area indicates that the very worst of penny pinching Is probably over."

In equity news, shares in Swiss banking software vendor Temenos after Hindenburg Research shorted the company alleging "accounting irregularities, failed products and an illusive turnaround".

The US investment research firm says a four-month investigation into Temenos, involving interviews with 25 former employees, including senior leaders at the company, uncovered hallmarks of manipulated earnings and major accounting irregularities.

Shares in Metso jumped almost 11% after the Finnish mining equipment maker reported a Q4 profit beat and gave upbeat outlook for its aggregates unit.

NatWest gained after the lender beat expectations with a 20% increase in full-year pre-tax operating profit.

Barclays initiated coverage of Dowlais on Friday with an 'overweight' rating and 110p price target, sending shares in the engineering firm spun off from defence contractor Melrose higher.

Nibe shares were down 7% as the Swedish heating technology group reported large fluctuations in demand and a clear decline in the European heat pump market in the second half of last year.

Action program to be initiated. Target of SEK 80 billion remains unchanged.

Reporting by Frank Prenesti for Sharecast.com