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Asian Markets at Close Report

European Markets at Close Report

Jul 7, 2016

European Markets at Close Report, by CNBC on July 7, 2016: Europe Ends Higher Despite Sharp Oil Decline Oil Decline...

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European stocks posted solid gains by Thursday's close, as investors shook off the renewed declines in oil prices and turned their attention to Friday's U.S. jobs report.
The pan-European STOXX 600 was up 1.2 percent; while sectors were positive across the board, with travel and financial stocks being the top performers.
London's FTSE 100 popped 1.1 percent, while its domestically-focusedFTSE 250 index jumped some 1.5 percent.
Symbol
Name
Price
 
Change
%Change
Volume
FTSEFTSE6533.79
 
70.201.09%1035918946
DAXDAX9418.78
 
45.520.49%91496980
CACCAC4117.85
 
32.550.80%102588005
IBEX 35IBEX 35 Idx8008.20
 
82.001.03%269739232
For most of the session, Europe was digesting the minutes from the Federal Reserve's June meeting, and preparing itself for Friday's highly anticipated jobs report.
Federal Reserve policymakers said it was prudent to wait for more data and the Brexit vote result before raising rates, and cited a slowdown in hiring as a reason to keep rates unchanged last month, according to meeting minutes released Wednesday afternoon. The non-farm payrolls report due Friday will be the next key data followed by markets; withinvestors watching for signs as to whether May's disappointing headline figure was an anomaly, or not.
In addition, hopes that the U.K.'s vote to leave the European Union (EU) could prompt further easing by central banks around the world—or at least a delay in interest rate rises in the U.S.—are seen as a major driver for positive market sentiment.
Oil markets were also eyed after prices reversed gains, to trade sharply lower in Europe's late session. Prices sank after data by the EIA revealed that U.S. crude stockpiles had fallen by 2.2 million barrels in the previous week; a far weaker inventory draw than what the API suggested.
Brent and U.S. crude tumbled on the back of the data, trading at $47.78 and $46.48 at Europe's close. The reversal added pressure to U.S. stocks on Thursday.
Elsewhere in commodities, basic resources closed sharply higher, after a positive outlook from several brokers on particular stocks boosted sentiment. Jefferies and UBS raised their price target for Anglo AmericanBHP BillitonAntofagasta and Glencore, sending shares in all of the miners up above 2.5 percent each.
On the currency front, sterling posted strong gains against the dollarduring Thursday's session, after it fell to a fresh 31-year low on Wednesday. However, by Europe's close it was trading roughly flat, at $1.2930.

Danone acquires WhiteWave Foods

In business news, Danone said it would acquire WhiteWave Foods in a deal that values the U.S. organic foods producer at $12.5 billion, in what would be the French company's biggest acquisition in 10 years. Danone shares rallied some 3 percent on the news.
A number of companies also reported trading updates and earnings. Britain's Marks & Spencer saw shares recover during trade, up over 2 percent, after it reported an 8.9 percent like-for-like fall in clothing and home sales in the 13 weeks to July 2, while food sales 0.9 percent.
Primark owner Associated British Foods soared some 10 percent after it said revenue for the 40 weeks ended June 18 was 3 percent ahead of the same period last year at constant currency. Sales at Primark in the year-to-date were 7 percent ahead of last year. 
British housebuilder Bovis Homes said it had traded in line with expectations in the first half of 2016 and it is "too early" to assess the impact of the country's EU referendum. Shares of the company jumped over 6 percent.

Financials rebound post-Brexit mess

In other news, the number of British property funds suspended after the country's vote to leave the EU rose to seven on Wednesday, leaving over 18 billion pounds ($23 billion) frozen in the biggest seizing up of investment funds since the 2008 financial crisis, Reuters reported.
Aberdeen Asset Management said withdrawals from its U.K. Property Fund would face a 17 percent dilution levy, and that it would not fulfill later orders, but Exane BNP Paribas raised its price target for the stock. Shares of the fund manager jumped over 3 percent as a result. Several other names which have been beaten up in recent days also rebounded including Aviva and Prudential.
The Italian banks were once again in focus for investors due to the large bad loan portfolio held by these lenders. Italian Prime Minister Matteo Renzi defended his country's banks saying that their bad loan problem is small in comparison to the issue of derivative exposure faced by other European lenders.
Banco Popolare fell over 2.5 percent after Exane BNP Paribas cut its price target for the stock.
Ratings agency Standard & Poor's revised its outlook on an array of U.K. banks on Thursday, in light of the country's decision to exit the EU; saying that the British economy was now entering a correction phase.
BarclaysHSBC, and Lloyds saw their rating outlooks cut to "negative" from "stable". RBS was cut to "stable" from "positive". Despite this, the positive sentiment in broader markets kept these banks in the black during trade.