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Asian Markets at Close Report

European Markets at Close Report

Jun 20, 2016

European Markets at Close Report, by CNBC, on June 20, 2016: Europe 3.7% Up as Brexit Fears Ease; FTSE Sees Best Day Since Ausgust 2015

cnbc.com
 
Arjun Kharpal, Alexandra Gibbs, Holly Ellyatt
European stocks surged by Monday's close, as declining fears of a Brexit vote buoyed global market sentiment, sterling and oil prices.

The pan-European STOXX 600 closed up 3.8 percent provisionally, with all sectors posting sharp gains between 2 and 5.5 percent each.

The U.K.'s FTSE 100 jumped 3 percent at the close. Meanwhile, France's CAC and Germany's DAX popped 3.4 and 3.5 percent respectively, posting their best days for several months. In peripheral bourses, the Athens Stock Exchange jumped 5.4 percent, powered by the rally in banks, while Spain's IBEX jumped 3.4 percent.

Brexit concerns ease




 


FTSE FTSE 6201.87
180.78 3.00% 734522286
DAX DAX 9957.91
326.55 3.39% 69262196
CAC CAC 4342.32
148.49 3.54% 87737099
IBEX 35 IBEX 35 Idx 8646.50
284.50 3.40% 190987667

Global markets have been reacting positively to several opinion polls over the weekend that showed that the remain camp was regaining momentum ahead of the referendum on European Union membership on Thursday.
Public opinion appears to have turned since the murder of pro-EU Labour MP Jo Cox last Thursday which led to the suspension of campaigning by both sides. However, pollsters claim that the death has had little impact on sentiment and the remain camp was always likely to gain support in the last few days running up to the vote. Campaigning has now resumed.
The British pound has climbed as the Brexit concerns have eased, reaching $1.468 around the end of Europe's Monday trading session, compared to levels of around $1.40 on Thursday. Oil prices also extended gains, due in part to the weaker dollar and Brexit concerns easing. Around the close, Brent hovered around $50.40, while U.S. crude was trading above 2.5 percent, around $49.20.
Despite Monday's rally, analysts said any further move in the Brexit polls could cause further moves either way in markets.
"The market will surely gyrate some more in the next few days as any shift in that position triggers an exaggerated reaction, not just for sterling but for wider risk sentiment," Kit Juckes, global head of FX strategy at Societe Generale, said in a note.

Banks on a tear

The banking sector closed up some 4.5 percent and led the gains in Europe boosted by a rally in the shares of the Italian and U.K. lenders.
Shares of Unicredit jumped over 3 percent after Italian newspaper Il Fatto Quotidiano reported that former Italian industry minister Corrado Passera could become the new chief executive.
Banca Popolare di Milano (BPM) initially surged 6.6 percent after it said it was looking into whether to reduce its stake in asset manager Anima Holding or launch a full takeover of the firm alongside Poste Italiane. The comments came in response to Italian regulator Consob saying that BPM and Poste Italiane's combined stake in Anima exceeded 25 percent, meaning they would have to launch a mandatory takeover bid under the authority's rules. Despite the surge, BPM's shares fell during trade, becoming one of Europe's only stocks in the red by later trade, off 1.5 percent.

London-listed banks, Lloyds, Royal Bank of Scotland, Barclays and Standard Chartered posted gains between 4 and 7 percent, on hopes that the U.K. may vote to stay in the EU.

Volkswagen rallies

In individual stock news, Volkswagen shares were over 4.5 percent higher after JPMorgan raised its price target and rating for the stock.
Pharmaceutical giant Roche announced the availability of a tool to help medical professionals detect the Zika virus. Shares were sharply higher on the back of the news.
Elsewhere, the easing of fears around Brexit also helped boost U.K. housebuilders Taylor Wimpey and Berkeley Group, both above 5 percent. Travel and leisure stocks was Europe's best performing sector, closing up 5.5 percent, with Thomas Cook, IAG and Ryanair jumping above 5 percent each.