Europe stocks rally after oil price rise,Fed minutes……………….07/07/2016

Europe stocks rally after oil price rise, Fed minutes

1 Hour Ago

European stocks rallied on Thursday after a sell-off earlier this week, buoyed by positive sentiment in the U.S. and a tentative rise in oil prices.

The pan-European STOXX 600 was up 1.3 percent. All sectors were trading sharply higher, with basic resources and financial stocks posting the strongest gains.

All major bourses were trading sharply higher, with London’s FTSE 100 up around 1 percent, while its domestically-focused FTSE 250 index up 1.3 percent. France’s CAC extended gains, up 1.2 percent, while Germany’s DAX jumped 0.7 percent.

European stocks rallied on Thursday after a sell-off earlier this week, buoyed by positive sentiment in the U.S. and a tentative rise in oil prices.

The pan-European STOXX 600 was up 1.3 percent. All sectors were trading sharply higher, with basic resources and financial stocks posting the strongest gains.

All major bourses were trading sharply higher, with London’s FTSE 100 up around 1 percent, while its domestically-focused FTSE 250 index up 1.3 percent. France’s CAC extended gains, up 1.2 percent, while Germany’s DAX jumped 0.7 percent.

Europe’s positive trade on Thursday follows a rebound in the U.S. on Wednesday on the back of a rise in oil prices and dovish minutes from the U.S. Federal Reserve’s June meeting.

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.

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. Asia markets however closed mostly mixed on Thursday, despite the Fed.

European stocks rallied on Thursday after a sell-off earlier this week, buoyed by positive sentiment in the U.S. and a tentative rise in oil prices.

The pan-European STOXX 600 was up 1.3 percent. All sectors were trading sharply higher, with basic resources and financial stocks posting the strongest gains.

All major bourses were trading sharply higher, with London’s FTSE 100 up around 1 percent, while its domestically-focused FTSE 250 index up 1.3 percent. France’s CAC extended gains, up 1.2 percent, while Germany’s DAX jumped 0.7 percent.

Symbol
Name
Price
Change
%Change
Volume
FTSE FTSE 6552.06
88.47 1.37% 542426529
DAX DAX 9429.24
55.98 0.60% 49737405
CAC CAC 4131.02
45.72 1.12% 53403479
IBEX 35 IBEX 35 Idx 8006.60
80.40 1.01% 142406054

Europe’s positive trade on Thursday follows a rebound in the U.S. on Wednesday on the back of a rise in oil prices and dovish minutes from the U.S. Federal Reserve’s June meeting.

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.

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. Asia markets however closed mostly mixed on Thursday, despite the Fed.

Need ‘gangbusters data’ to see Fed move: Pro2 Hours Ago|02:46

Oil markets are also being watched after prices rose in early trading on Thursday. The increase was supported by a report of another fall in U.S. crude inventories as well as a weaker dollar, however a glut of refined products and economic growth concerns continue to weigh on markets. Brent and U.S. crude are currently higher, trading around $49.30 and $47.95 around 12.30 p.m. U.K. time.

Elsewhere in commodities, basic resources was Europe’s top sector, up over 3 percent, as a positive outlook from several brokers on particular stocks boosted sentiment. Jefferies and UBS raised their price target for Anglo American, BHP Billiton, Antofagasta and Glencore, sending shares in all of the miners up above 2.5 percent each.

On the currency front, sterling recovered some of its losses after hitting a fresh 31-year low on Wednesday. The pound was up against the dollar on Thursday, trading at $1.3034 around 12.30 p.m. London time.

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 over 3.5 percent on the news.

A number of companies also reported trading updates and earnings. Britain’s Marks & Spencer saw shares slip 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. The retailer said it was “too early to quantify the implications of Brexit” and reiterated its full-year guidance.

U.K. retailer Sports Direct reported an 8.4 percent year-on-year decline in pretax profit for the year ending April 24. Despite this, shares of the sports retailer jumped 4 percent.

Primark owner Associated British Foods was up over 8 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 5.5 percent.

Financials rebound post-Brexit mess; Italy banks slip

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 5 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.

Intesa Sanpaolo shares were up over 2 percent after Exane BNP Paribas raised its outlook on the stock from “neutral” to “outperform”. The chairman of Intesa Sanpaolo said the bank will not put money into Atlante – the Italian bank rescue fund. While, Banco Popolare, whose shares hit a fresh record low on Wednesday, fell over 3.5 percent after Exane BNP Paribas cut its price target for the stock.

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