INGOT Brokers AU | European market report (2017-09-07)

European market report (2017-09-07)

Following today’s strong economic data as well as the European Central Bank leaving its monetary policy unchanged, the European equity markets rose to settle higher in the green.

Meanwhile, these gains were limited as the European Euro surged to its highest in three months thus weighing on the stock market gains.

The Stoxx Europe 600 Index rose by 0.27 percent to settle slightly higher at 374.95, with all of its sectors in the green except the financial sector.

In the Stoxx 600 banking index, the Deutsche Bank AG fell by 1.19 percent and Société Générale SA lost 0.39 percent, where higher interest rates could boost their net interest margins.

The European Central Bank left its interest rates unchanged and it will continue with its asset-purchase program at 60 billion Euros a month through the end of 2017 or beyond, and that stimulus measures could be ramped up if the outlook deteriorates.

The Euro zone economy expanded at a faster pace than expected in the second quarter as the data showed today, Gross domestic product grew by 2.3 percent on its yearly basis in the second quarter, faster than the 2.1 percent expansion seen in the first quarter.

 

FTSE 100

The positive housing data released earlier today led the country’s equities higher with the FTSE 100 settling higher at 7,396.98 gaining 42.85 points or 0.58 percent.

Halifax house price index came out surprisingly beating the market estimates on both its monthly and yearly basis at 1.1 percent and 2.6 percent respectively.

Bovis Homes surged by 10.36 percent despite its weak half-year results as it said that it would raise its dividend for the current year and the next thus reflecting confidence in the new chief executive Greg Fitzgerald.

Moreover, AstraZeneca gained 4.32 percent after posting positive results from a late-stage trial of its respiratory treatment Duaklir and Tobacco company Imperial Brands rallied by 2.80 percent after trimming its stake in Spanish logistics company Logista.

Meanwhile, Outsourcer Capita tumbled by 2.41 percent after restating its 2016 accounts due to accounting changes and Ashmore Group slumped 6.82 percent even as the emerging markets-focused asset manager reported stronger-than-expected full-year earnings.

Royal Bank of Scotland fell by 1.4 percent as lawmakers called on the Financial Conduct Authority to publish its report on potential missteps by the bank's business restructuring unit.

 

DAX30

The German equities expanded their gains over yesterday’s shares’ rating upgrades by Goldman Sachs and Barclays, with the stock market index DAX30 ending higher at 12,296.63 after rising by 0.67 percent or 82.09 points.

Automakers extended their rally, with BMW rising by 1.09 percent, Daimler gaining 0.79 percent and Volkswagen adding 0.34 percent

Moreover, following Deutsche Bank raising the price targets for both RWE AG ST O.N. and E.ON SE NA, they both gained 3.8 percent and 1.86 percent respectively.

 

CAC40

The CAC40 settled higher at 5,114.62 gaining 13.22 points after gapping higher on today’s open, despite the negative trade data showing a widened trade deficit by a large margin.

The French trade deficit widened in July, as imports grew faster than exports. The trade shortfall rose to 5.97 billion Euros in July from 4.88 billion Euros in June.

France's current account deficit increased in July. The seasonally and working-day-adjusted current account deficit rose to 4.2 billion Euros in July from 2.4 billion Euros in the previous month.

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