EUROPE MARKETS: Banks Push Stoxx Europe 600 Toward Highest Level Since September
December 07 2016 - 8:38AM
Dow Jones News
By Carla Mozee, MarketWatch
PostNL rejects bid offer; BMPS rallies
European stocks were trading at their highest in more than two
months Wednesday, driven by a surge in bank shares on hopes of a
state-backed rescue for struggling Italian lenders and as Credit
Suisse said its restructuring plan is working.
The Stoxx Europe 600 index tacked on 0.7% at 346.93, on track
for its highest close since Sept. 22, according to FactSet data.
The index is set for its third day of gains after ending up by 1%
on Tuesday
(http://www.marketwatch.com/story/european-stocks-step-higher-as-banks-stage-a-revival-2016-12-06).
Financials and basic materials topped the sector gainers
Wednesday.
Banks sustain rally: Among financials, bank stocks popped
higher, led by a 6.5% climb for Credit Suisse Group AG (CSGN.EB)
(CSGN.EB) . Those shares were on course for their strongest gain
since April. Chief Executive Tidjane Thiam said the Swiss banking
heavyweight's restructuring "strategy is working," after making
more job cuts than anticipated. But the bank lowered some profit
targets
(http://www.marketwatch.com/story/credit-suisse-cuts-targets-says-revamp-is-working-2016-12-07)
that it set last year, while holding to the goals it set for wealth
management units.
In other moves, HSBC Holdings PLC (HSBA.LN) (HSBA.LN) rose 2.8%
and France's Crédit Agricole (ACA.FR) rose 1.2%, holding to higher
ground after EU antitrust authorities fined the banks and other
lenders a total of EUR485 million
(http://www.marketwatch.com/story/jp-morgan-other-banks-slapped-with-eu-fines-totaling-520-mln-2016-12-07)
($520 million), saying they participated in a cartel that aimed to
steer a benchmark interest rate.
Meanwhile, Italian bank stocks pushed higher after reports
Wednesday that the Italian government is taking steps to rescue
Banca Monte dei Paschi Siena SpA
(http://www.marketwatch.com/story/bmps-jumps-11-on-hopes-of-16-billion-rescue-loan-for-italian-banks-2016-12-07)(BMPS.MI)
and other struggling lenders. Off the Stoxx 600, BMPS shares surged
9.6%. The FTSE Italia All-Share Banks Sector Index rose 4.7%,
building on Tuesday's 9% rally.
Shares of Italy's BPER Banca SpA (BPE.MI) shot up 10% to top the
Stoxx 600. Meanwhile, Italy's largest lender, UniCredit SpA
(UCG.MI) , jumped 7.9%.
Worries about the health of the Italian economy and the
integrity of the eurozone have grown after voters rejected Prime
Minister Matteo Renzi's reform proposals. Renzi's resignation,
announced after Sunday's referendum, is expected to be effective on
Friday, according to Reuters.
Read:How Italy's 'no' vote might be the ECB's silver lining
(http://www.marketwatch.com/story/how-italys-no-vote-might-be-the-ecbs-silver-lining-2016-12-05)
Also: The other loser in Italy's vote -- its big banks
(http://www.marketwatch.com/story/the-other-loser-in-italys-vote-its-big-banks-2016-12-05)
ECB on deck: Investors widely expect the European Central Bank
to extend its stimulus for the eurozone, including its bond-buying
program, when it meets Thursday.
"Any hints that the central bank will be extending QE beyond the
intended end date of March 2017 should be bad news for the euro,
and good for [European] stocks, said Fawad Razaqzada, technical
analyst at Forex.com, in a note. "Even if the ECB maintains status
quo, the Fed could spark a rally in the dollar next week, which may
undermine the euro-dollar and underpin European stocks."
The euro was trading at $1.0732, up from $1.0715 late Tuesday in
New York.
Miners: Rio Tinto PLC (RIO) (RIO) (RIO) was a top performer
Wednesday, with shares up 4.6% after Credit Suisse raised the
diversified miner's rating to outperform from neutral.
Credit Suisse said it's maintaining a "positive view" on the
mining sector, saying it expects "apparent demand trends to
continue to recover following the aggressive destock through
2014-15," among other drivers for the industry.
Gains for mining shares helped lift the U.K.'s FTSE 100 by 1.5%
(http://www.marketwatch.com/story/ftse-100-climbs-1-powered-by-mining-shares-2016-12-07).
Other movers: PostNL NV shares (PNLYY) tumbled 11% after the
Dutch mail delivery company rejected a revised takeover bid
(http://www.marketwatch.com/story/postnl-rejects-revised-bpost-buyout-proposal-2016-12-07-64852435)
from Belgian postal service Bpost SA (BPOST.BT) . Bpost shares were
up 0.4%.
(http://www.marketwatch.com/story/the-other-loser-in-italys-vote-its-big-banks-2016-12-05)Indexes:
In Frankfurt, the DAX 30 index leapt 1.4% to 10,934.13, and
France's CAC 40 index moved up 0.8% to 4,667.18. Spain's IBEX 35
rose 0.4% to 8,924.
(END) Dow Jones Newswires
December 07, 2016 08:23 ET (13:23 GMT)
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