EUROPE MARKETS: European Stocks Gain Ground As German Business Sentiment Strengthens
November 24 2017 - 6:06AM
Dow Jones News
By Carla Mozee, MarketWatch
Euro extends its rise
Major European stocks benchmark moved higher Friday, with bank
shares among gainers and the markets getting a lift as German
business optimism climbed to a record.
But the euro remained in focus as it continued to extend gains
for the week.
Trading volumes will likely be thin on Friday as U.S. markets
will be on a shortened schedule
(http://www.marketwatch.com/story/when-do-markets-close-for-thanksgiving-2017-11-17)
following Thursday's Thanksgiving Day holiday.
How key gauges moved: In Paris, the CAC 40 claimed a 0.3% rise
at 5,395.34 following Thursday's close at a near two-week high. In
Madrid, the IBEX 35 picked up 0.6% to reach 10,098.10.
The export-heavy German DAX 30 benchmark was up 0.1% at
13,025.59, on track for a modest weekly rise of 0.2%.
But the U.K.'s FTSE 100 index was down 0.3% at 7,396.60. That
kept pressure on the Stoxx Europe 600 , which was down 0.1% at
386.91. Health care and telecom stocks led the declining sectors on
the pan-European index. But tech and financial shares were higher.
On Thursday, the benchmark closed up less than 1 point
(http://www.marketwatch.com/story/european-stocks-head-toward-2nd-straight-loss-as-euro-pushes-higher-2017-11-23)
after a topsy-turvy session.
For the week, the Stoxx 600 was on course to rise 0.9%. That
would be the first weekly rise in three.
The euro bought $1.1872, up from $1.1850 late Thursday in New
York. The shared currency has added roughly 0.7% this week.
What's driving markets: Businesses in Germany have been upbeat
about their prospects this month and for the months ahead. German
think tank Ifo said Friday its business climate index rose to a
record high
(http://www.marketwatch.com/story/german-business-sentiment-pushes-to-record-high-2017-11-24)
of 117.5 points, surpassing expectations.
"Germany is on track for an economic boom," said Ifo president
Clemens Fuest in the report.
But the bulk of the Ifo survey's responses came before the
collapse of talks to create a coalition to form a German government
on Sunday.
Still, the euro extended gains following the Ifo report, having
risen Thursday after an upbeat reading on eurozone services and
manufacturing activity
(http://www.marketwatch.com/story/eurozone-business-booming-as-pmis-jump-2017-11-23)
and a finding of higher growth in German gross domestic product
(http://www.marketwatch.com/story/german-economy-picked-up-speed-in-3q-2017-11-23).
A stronger euro can be a headwind to shares of European
exporters as it makes products made by those companies more
expensive for holders of other currencies to purchase.
The political crisis in Germany was still in focus, after the
Social Democrats reportedly dropped their hard refusal
(https://www.politico.eu/article/martin-schulz-social-democrats-mulling-renewed-grand-coalition-with-angela-merkel/)
to set up another Grand Coalition to govern alongside Chancellor
Angela Merkel's Christian Democrats.
What strategists are saying: The [euro-dollar pair] is one of
the talking points for us as technically it approaches some key
levels in its recent set ups with 1.1880 now acting as the key
resistance on the upside," said James Hughes, chief market analyst
at Axi Trader, in a note. "It's been a strange week for the euro
with traders not entirely sure what to make of the news of a
breakdown in talks, and the possibility of another election."
"European markets are trading cautiously this morning, despite a
broadly positive Asia session, and more decent economic reports
from Germany, with most of the focus at the end of a fairly choppy
week on retailers as the Black Friday sales get under way in
earnest," said CMC Markets chief market analyst Michael Hewson, in
a note.
"After two successive weeks of losses we do appear to be seeing
some stabilization but the overall mood appears to be one of
caution," Hewson said.
Stock movers: BT Group PLC (BT.A.LN) fell 1.2%, with Deutsche
Bank cutting its price target on the British telecoms group to
GBP2.38 from GBP2.68, according to Dow Jones Newswires.
Italian banks were among the best performers on the Stoxx 600,
with BPER Banca SpA (BPE.MI) up 5.7%, Banco BPM SpA (BAMI.MI)
higher by 5.4% and Unione di Banche Italiane SpA (UBI.MI) up
4.5%.
(END) Dow Jones Newswires
November 24, 2017 05:51 ET (10:51 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024