EUROPE MARKETS: European Stocks Step Higher, With Bank Gains Providing A Lift
September 21 2017 - 5:32AM
Dow Jones News
By Carla Mozee, MarketWatch
After U.S. Fed decision, the regional bank index is on course
for two-week high
European stocks advanced Thursday, with banks stocks marching
higher after the U.S. Federal Reserve indicated it will continue to
raise borrowing costs.
The Stoxx Europe 600 index was up by 0.2% at 382.77, led by
financial shares. But utility stocks lagged behind. On Wednesday,
the benchmark closed fractionally lower
(http://www.marketwatch.com/story/european-stocks-mark-time-as-investors-stay-focused-on-fed-decision-2017-09-20)
as investors marked time before the highly anticipated Fed policy
announcement.
After European trade closed Wednesday, the Fed said it will
begin to shrink its huge $4.5 trillion balance sheet in October
(http://www.marketwatch.com/story/feds-yellen-says-low-inflation-a-mystery-but-not-mysterious-enough-to-keep-rates-low-2017-09-20).
The U.S. central bank also signaled plans for one more increase in
interest rates before the end of 2017, which should lift borrowing
costs for auto loans, mortgages and business loans. Fed policy
makers also hinted at another three rate hikes in 2018.
The prospect of higher interest rates bolstered bank stocks on
Wall Street and in Europe, where the Stoxx Europe 600 Bank Index
charged up 1.7%, on track for a two-week high.
In that index, Deutsche Bank AG (DBK.XE) (DBK.XE) popped up
3.8%, Societe Generale SA (GLE.FR) picked up 2.4%, HSBC Holdings
PLC (HSBA.LN) (HSBA.LN) rose 1.1%, and Banco Santander SA (SAN)
moved up 1.9%.
"Before the Fed announced its decision, there were high
expectations that monetary policy makers would drag interest rate
expectations lower for 2017," said Hussein Sayed, chief market
strategist at FXTM.
"Instead, the U.S. central bank decided to look past low
inflation and said the harm of the hurricanes would have no lasting
economic impact," he said in a note, referring to damage from
recent Hurricanes Harvey and Irma.
Sayed said markets have higher expectations for an interest rate
hike in December, with investors now seeing a 70% chance of a hike,
up from 50% before the Fed decision.
Stock movers: Elsewhere in the banking group, shares of
Commerzbank AG (CBK.XE) rallied 5.1%, extending gains Wednesday
following a Reuters report
(https://uk.reuters.com/article/uk-unicredit-merger-commerzbank-exclusiv/exclusive-italys-unicredit-signals-interest-in-deal-with-germanys-commerzbank-sources-idUKKCN1BV1XS)
that Italy's UniCredit SpA (UCG.MI) is interested in merging with
the state-backed lender. But the German government favors
Commerzbank tying up with France's BNP Paribas SA (BNP.FR) ,
Reuters reported Thursday. BNP shares bulked up 2%.
CRH PLC (CRG.DB) shares moved up by 3%. The Irish building
materials supplier plans to buy Ash Grove Cement Co
(http://www.marketwatch.com/story/crh-agrees-to-buy-ash-grove-cement-in-35-billion-deal-2017-09-21).(ASHG)
in a deal valuing the U.S. cement provider at $3.5 billion, the
companies said.
Capita PLC shares (CPI.LN) plunged 12% after the outsourcing and
professional services company posted a 26% fall in pretax profit
for the first half of the year
(http://www.marketwatch.com/story/capita-profit-falls-26-but-trading-in-line-2017-09-21).
It did say that trading was broadly in line with expectations.
Ryanair Holdings PLC (RYAAY) fell 2.9%, after a group of the air
carrier's pilots on Wednesday reportedly rejected a cash bonus
(http://www.bbc.co.uk/news/business-41342309) to work extra days
after Ryanair's cancellation of more than 2,000 flights.
Indexes: Germany's DAX 30 index rose 0.4% to 12,613.26, and
France's CAC 40 index picked up 0.6% to 5,271.21.
The U.K.'s FTSE 100 index added 0.1% to reach 7,282.93. Spain's
IBEX 35 advanced 0.3% to 10,326, after closing 1.2% lower on
Wednesday as Spanish police arrested 13 Catalan officials
(http://www.marketwatch.com/story/catalan-officials-arrested-in-spain-ahead-of-banned-independence-vote-2017-09-20)
in a battle over a regional independence referendum.
The euro bought $1.1918, up from $1.1895 late Wednesday in New
York. The dollar had earlier pushed higher against major rivals
after the Fed's plans to wind down its bond-buying program.
Read:Don't call the German election boring--it could be huge
leap or setback for the eurozone
(http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)
(http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)Also
read:German election: Who's Merkel up against and what are their
chances?
(http://www.marketwatch.com/story/german-election-whos-merkel-up-against-and-how-could-they-shape-the-new-government-2017-08-31)
(END) Dow Jones Newswires
September 21, 2017 05:17 ET (09:17 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Aug 2024 to Sep 2024
FTSE 100
Index Chart
From Sep 2023 to Sep 2024