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May 27, 2019

Europe | Europe Markets Closing Report | Europe stocks close higher in the wake of EU elections; Renault jumps 12% on Fiat merger talks

Chloe Taylor, Ryan Browne

European Markets: FTSE, GDAXI, FCHI, IBEX

FTSEFTSE 100FTSE7277.7346.690.65653148230
Germany’s DAX closed about 0.5% higher while France’s CAC climbed 0.3%. Italy’s FTSE MIB jumped 0.6% initially, but fell into negative territory during the afternoon session after a report Brussels is considering disciplinary action over Rome’s failure to rein in public debt.
Markets in the U.K. and U.S. were closed Monday, meaning trading volumes were low.
Investors in Europe were largely focused on results of the EU parliamentary elections. Results showed a strong showing for Liberal and Green parties, while euroskeptic groups in Britain and France held the gains they saw in 2014.
Pro-EU parties are still expected to make up the majority of the Parliament, however, holding on to about two-thirds of the seats. Right-wing populist parties in both the U.K. and France made solid gains, with Nigel Farage’s Brexit Party comfortably beating Britain’s two main parties and Marine Le Pen’s National Rally narrowly beating President Emmanuel Macron’s centrist party.
The euro lost some ground against the dollar on Monday afternoon, trading just below $1.12 and trimming its earlier gains.
Sectors were mostly in positive territory, with autos up nearly 1.5%, getting a boost from the news that Fiat Chrysler and Renault are in early merger talks.
Renault surged to the top of the European benchmark after Fiat confirmed it had filed a proposal for a merger with its French rival. In a press release, Fiat said the joint organization would produce estimated sales of 8.7 million vehicles a year and would be considered the world’s third largest car manufacturer.
Shares of Fiat Chrysler rose 8%, while Renault surged almost 12% higher.
French automaker Peugeot Citroen’s shares fell more than 3% on the back of the news, making it the worst performer in the European autos sector.
Elsewhere, trade tensions continued to be a focal point for investors. The billionaire founder of Chinese telecoms giant Huawei, Ren Zhengfei, told Bloomberg on Sunday that despite Beijing’s heated trade war with the U.S., he would oppose any Chinese retaliation against major rival Apple.
Meanwhile, U.S. President Donald Trump on Monday put pressure on Japan to have the balance of trade between the two countries “straightened out rapidly.” Trump has threatened to hit the country’s automakers with high tariffs.

Source: CNBC

Asia | Asia Markets Closing Report | China markets finish higher; Trump is in Japan for a state visit

Eustance Huang

Stocks in China jumped on Monday as investors watched for developments from U.S. President Donald Trump’s state visit to Japan as well as results from the European parliamentary election.
In mainland China, the Shenzhen composite rose 2.506% to close approximately at 1,533.52 and the Shenzhen component gained 2.31% to finish its trading day at 8,979.83. The Shanghai composite gained 1.38% to close at around 2,892.38.
Over in Hong Kong, however, the Hang Seng index slid around 0.1%, as of its final hour of trading.
In Japan, the Nikkei 225 rose 0.31% to close at 21,182.58, with shares of index heavyweight Fast Retailing advancing 1.33%. The Topix also gained 0.38% to end its trading day at 1,547.00.
Over in South Korea, the Kospi slipped fractionally to close at 2,044.21, while Australia’s ASX 200 also ended its trading day slightly lower at 6,451.90.

Asia-Pacific Market Indexes Chart

NIKKEINikkei 225 IndexNIKKEI21182.5865.360.31
HSIHang Seng IndexHSI27288.09-65.84-0.24
ASX 200S&P/ASX 200ASX 2006451.90-4.10-0.06
KOSPIKOSPI IndexKOSPI2044.21-1.10-0.05
CNBC 100CNBC 100 ASIA IDXCNBC 1007700.8916.570.22
In Europe, early results showed greater fragmentation in the European Parliament over the next five years. This year’s vote was particularly relevant due to the surge of anti-EU and nationalist parties across the region. Pro-EU parties will hold onto two-thirds of the seats at the EU Parliament, but their nationalist opponents have also produced solid results.
Britain’s newly-formed Brexit Party comfortably beat the country’s two main parties in the European parliamentary elections, according to early results.
“I think it makes the whole thing much more confusing from the political side but I’m not so sure whether it changes the economics that much,” Richard Harris, chief executive of Port Shelter Investment Management, told CNBC’s “Squawk Box” on Monday. “Europe hasn’t actually been doing too badly.”
The common currency, euro, traded at $1.1201 against the dollar Monday afternoon, rising from levels below $1.1130 in the previous week.
Meanwhile, U.S. President Trump is on a state visit to Japan, where he earlier said Tokyo has “had a substantial advantage” over Washington for “many, many years.”
The president said Tokyo and Washington were “getting close” to a deal that would address the U.S. trade deficit. The U.S. had a deficit of $56.8 billion in goods and services with Japan in 2018, according to the U.S. Trade Representative. Trump’s visit comes amid U.S. threats of potential auto tariffs against Japanese and European carmakers.
“There has been nothing but bonhomie between President Trump, currently in Japan, and Japan prime Minister (Shinzo) Abe, ” Ray Attrill, head of foreign exchange strategy at National Australia Bank, wrote in a morning note.
“The trade rhetoric sound(s) all warm and fuzzy, but there is no expectation a comprehensive trade deal will be struck anytime soon,” he said.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.639 after slipping from levels above 98.1 last week.
The Japanese yen traded at 109.50 against the dollar after touching levels above 110.4 in the previous trading week. The Australian dollar changed hands at $0.6929 after seeing lows below $0.688 last week.
Oil prices were mixed in the afternoon of Asian trading hours, as the international benchmark Brent crude futures contract was fractionally higher at $68.74 per barrel, while U.S. crude futures dropped 0.49% to $58.34 per barrel.
— CNBC’s Spencer Kimball, Sam Meredith and Matt Clinch contributed to this report.

Source: CNBC