UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Weaker dollar helps drive action, as traders regain appetite for risk

European stocks on Thursday pushed higher, with Airbus SE shares soaring after a well-received financial update, as traders appeared to regain their appetite for riskier assets.

Meanwhile, weakness in the dollar was encouraging investors to load up on commodity-related shares.

Those moves were helping steer the regional equity market closer to breaking a run of weekly losses.

How markets are moving

The Stoxx Europe 600 index picked up 0.7% to 377.32, led by the basic materials and oil and gas groups. But on the losing end were the consumer goods and utilities sectors. On Wednesday, the pan-European index rose 1.1% in a volatile session (http://www.marketwatch.com/story/european-stocks-perk-up-after-german-growth-data-2018-02-14).

Germany's DAX 30 index was up 0.6% to 12,416.43, adding to Wednesday's jump of 1.2%. France's CAC 40 index surged 1.2% to 5,228.83, extending Wednesday's rise of 1.1%.

Spain's IBEX 35 leapt 1.1% to 9,795.30. The U.K.'s FTSE 100 was up 0.5% at 7,251.47.

The euro bought $1.2488, up from $1.2452 late Wednesday in New York.

In the fixed-income market, the yield on the 10-year German bund rose 2 basis points to 0.774%, according to Tradeweb.

What's driving the market

Investors appeared solidly on board to take on risk, with the oil and mining sectors gaining. The falling U.S. dollar aided most commodities with dollar-denominated prices, such as copper and oil . Crude oil prices were building on Wednesday's rally, which was also bolstered by data showing a smaller-than-expected rise (http://www.marketwatch.com/story/oil-prices-add-to-gains-after-best-day-in-months-2018-02-15) in weekly U.S. crude inventories.

Stronger-than-expected U.S. inflation data (http://www.marketwatch.com/story/cpi-surges-05-in-january-but-yearly-rate-of-inflation-unchanged-2018-02-14) and rising Treasury yields initially lifted the greenback on Wednesday, but that was accompanied by data showing an unexpected drop in U.S. retail sales. Those mixed signals may have helped sink the dollar, analysts said.

European stocks advanced even as the euro approached $1.25 for the first time since early February, as the dollar dropped. Euro strength can hurt sales of European products in overseas markets, and in turn hurt shares of those exporters.

With one trading day left this week, the Stoxx Europe 600 was looking at a weekly rise of 2.4%. That would mark the first win in four weeks.

Check out:Here's why the U.S. dollar isn't getting much love (http://www.marketwatch.com/story/heres-why-the-us-dollar-is-nobodys-valentine-2018-02-14)

What strategists are saying

"There was an appreciable initial knee-jerk push of dollar strength [Wednesday], however this turned completely around as the outlook showed inflation was beginning to turn a corner, but not spiking higher in a sense that would have resulted in a massive and sustainable risk-off move," said Richard Perry, an analyst at Hantec Markets.

"Rising inflation in a controllable fashion is positive for markets and retains an outlook of dollar negativity," Perry said in a note.

Stock movers

Airbus SE shares (AIR.FR) rallied 9.5% in Paris. The European plane maker said it's starting to reap the benefits of higher production (http://www.marketwatch.com/story/airbus-reaps-benefits-of-rising-plane-production-2018-02-15) that helped it generate a higher-than-expected EUR2.95 billion ($3.68 billion) in free cash flow before mergers, acquisitions and customer financing.

Nestlé SA (NESN.EB) fell 2.4% after the Swiss consumer goods producer said a key measure of sales growth came in at 2.4% in 2017, the slowest pace in decades (http://www.marketwatch.com/story/nestle-sales-growth-at-slowest-in-decades-2018-02-15).

The Stoxx Europe 600 Basic Materials index leapt 2.5% and the Stoxx Europe 600 Oil and Gas index charged up 1.2%.

Within the first group, miner Glencore (GLEN.LN) popped up 3.1%, and steel maker ArcelorMittal SA (MT) rose 2.6%. Oil producer Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) added 1.4%.

Financial company Standard Life Aberdeen PLC shares (SLA.LN) dropped 4.6%. It said Lloyds Banking Group PLC (LLOY.LN) and Scottish Widows have given notice to end the GBP109 billion (http://www.marketwatch.com/story/standard-life-end-of-lloyds-scottish-widows-deal-2018-02-15) ($151.7 billion) investment-management arrangement that was reached in 2014. Lloyds shares climbed 1.3%.

(END) Dow Jones Newswires

February 15, 2018 05:14 ET (10:14 GMT)

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