EUROPE MARKETS: European Stocks Log Best Close In About A Week
July 17 2018 - 1:15PM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
Shares in Norwegian telecom Telenor lose ground
Europe's pan-European index finished at its highest level in
about a week on Tuesday, with analysts attributing at least some of
the gains to encouraging comments from U.S. Federal Reserve
Chairman Jerome Powell about the economy.
How markets are performing
The Stoxx Europe 600 index rose by 0.2% to end at 384.98,
recovering most of Monday's loss of 0.3%
(http://www.marketwatch.com/story/european-stocks-slip-on-china-growth-concerns-but-deutsche-bank-leaps-2018-07-16).
Among the national indexes, France's CAC 40 index added 0.2% to
finish at 5,422.54, and Germany's DAX 30 index jumped 0.8% to
12,661.54. The U.K.'s FTSE 100 index was up 0.3% to end at
7,626.33.
In currencies, the euro slipped to $1.1663 from $1.1712 late
Monday in New York.
What is driving the market?
European stocks overall drifted higher alongside U.S. stocks as
Fed chief Powell delivered testimony before the Senate Banking
Committee. The U.S. central bank has indicated it plans to raise
interest rates another two times in 2018, and investors appeared to
cheer confirmation of this view from Powell.
Strategists world-wide track the central bank for the world's
largest economy, as its moves can affect a range of asset classes.
While the Fed has been firmly on the rate-hike path, the European
Central Bank isn't expected to begin raising interest rates until
around the third quarter of 2019.
Earlier Tuesday, European stocks had stepped, weighed largely by
a slump in telecom stocks. Decliners included Telenor ASA after the
Norwegian company issued financial results and its rival, Telia
Co., struck a more than $2 billion acquisition deal aimed at
bolstering Telia's business in Norway.
What strategists are saying
Powell painted "a positive picture," said Michael Hewson, chief
market analyst at CMC Markets UK, in a note.
"He reiterated the belief that rates needed to continue to go
higher, and that financial conditions still favour a decent level
of economic growth."
Stock movers
Thyssenkrupp AG (TKA.XE) surged 9.1% following the resignation
of supervisory chairman Ulrich Lehner. Lehner's "sharply worded
resignation" on Monday "makes clear that aggressive restructuring
may be in the cards," said Jefferies analyst Seth Rosenfeld in a
note.
Schibsted ASA (SCHA.OS) rallied 12.6% following second-quarter
results from the Norwegian media group, which included a rise to
record earnings before interest, taxes, depreciation, and
amortization.
SBM Offshore NV (SBMO.AE) sank 18% after a ratings downgrade at
Bernstein of the Dutch offshore oil-and-gas services company to
market-perform from outperform.
Husqvarna AB (HUSQ-B.SK) sank by more than 17% following
financial results from the Swedish garden tool company, which also
said it is planning to restructure its underperforming consumer
brands division.
Telia Co. AB slumped 4.1% after the Swedish telecom reached a
deal to buy TDC A/S's Norwegian business for 21 billion Norwegian
krone, or roughly $2.6 billion.
Telenor ASA (TEL.OS) fell 4% as the Norwegian telecom company's
swing to a second-quarter net profit fell short of expectations
(http://www.marketwatch.com/story/telenor-swings-to-profit-but-misses-forecasts-2018-07-17).
The company did say it will continue to simplify its business and
increase efficiency.
(END) Dow Jones Newswires
July 17, 2018 13:00 ET (17:00 GMT)
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