EUROPE MARKETS: European Stocks 'burst Into Life' As Germany's DAX Ends At 2-week High
November 21 2017 - 12:24PM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
'Investors have faith that Germany will find a way to move past
its current uncertainty,' strategist says
European stocks closed higher Tuesday, aided by gains for
airline easyJet PLC and car maker Volkswagen AG, as investors
appeared to set aside concerns about the possibility of a new
election in Germany.
Equity markets in the region rose as major U.S. stock gauges
rallied
(http://www.marketwatch.com/story/nasdaq-shapes-up-for-another-record-with-retail-earnings-on-deck-2017-11-21),
with a leap in technology shares pushing the Nasdaq Composite Index
to an all-time high.
What markets are doing: The Stoxx Europe 600 rose 0.4% to end at
388.10, building on Monday's gain of 0.7%
(http://www.marketwatch.com/story/european-stocks-stage-recovery-in-wake-of-german-political-uncertainty-2017-11-20).
The regional benchmark logged its highest close since Nov. 9, or
nearly two weeks ago.
In Frankfurt, the DAX 30 index finished 0.8% higher at
13,167.54, while France's CAC 40 picked up 0.5% to 5,366.15.
The U.K.'s FTSE 100 was up 0.3% to close at 7,411.34.
The euro bought $1.1741, up slightly from $1.1733 late Monday in
New York.
What's moving markets: The prospect of a snap election in
Germany was heightened after Chancellor Angela Merkel late Monday
said she would prefer voters go back to the ballot box
(http://www.marketwatch.com/story/germanys-merkel-would-prefer-new-election-over-minority-government-2017-11-20)
over a minority government. Over the weekend, negotiations between
her political party and two others to form a "Jamaica" coalition
government broke down
(http://www.marketwatch.com/story/the-euro-still-can-break-higher-analysts-react-to-germanys-political-uncertainty-2017-11-20).
But broadly lower moves for the euro against its major rivals
appeared to aid shares of European exporters, as a stronger value
for the shared currency can make their products more expensive for
overseas clients to purchase.
What strategists are saying: "Despite plenty for investors to be
down about--including, but not limited to, the political
instability in Germany, what could be a damp squib [U.K.] Autumn
Budget tomorrow and, well, Brexit--the markets burst into life this
Tuesday afternoon," said Connor Campbell, financial analyst at
Spreadex, in a note.
"It seems investors have faith that Germany will find a way to
move past its current uncertainty without the kind of
performance-damaging aftermath seen by some of its peers (looking
at you, Spain and the U.K.)," he added.
Stock movers: EasyJet (EZJ.LN) shares bounced up 5.1%. The move
came after the low-cost airline said passenger traffic rose 10% in
fiscal 2017
(http://www.marketwatch.com/story/easyjet-net-profit-down-24-passenger-traffic-up-2017-11-21),
but that net profit fell 24%.
Aggreko PLC shares (AGK.LN) slid 11%. The supplier of generators
and chillers said quarterly revenue at its power solutions utility
division fell 11%, stemming from its business in Argentina. The
company maintained its full-year guidance.
Shares of Volkswagen (VOW.XE) leapt 3%. The gain added to
Monday's rise of 4.2%, logged after the car maker raised its
midterm forecast for sales and profit.
Babcock International Group PLC (BAB.LN) dropped 6.8%. The
defense contractor said a U.K. government review may delay the
introduction of large programs to upgrade some land-based military
equipment.
Economic data: The U.K. government borrowed more in October than
it did a year ago
(http://www.marketwatch.com/story/uk-public-borrowing-increases-in-october-2017-11-21)
as price growth pushed up the cost of servicing inflation-linked
debt, according to the Office for National Statistics. Britain's
borrowing increased by GBP500 million to GBP8 billion.
The figures arrived before the U.K. government presents its
budget on Wednesday, expected to be presented by Chancellor Philip
Hammond at around 12:30 p.m. London time, or 7:30 a.m. Eastern
Time.
(END) Dow Jones Newswires
November 21, 2017 12:09 ET (17:09 GMT)
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