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European Stocks Track Wall Street Higher as Risk Appetite Returns

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Last updated: 05/19/2017 07:21:10

07:21 AM EDT, 05/19/2017 (MT Newswires) -- European equity benchmarks rebounded from three days of declines on Friday as a renewal of risk appetite following a sharp sell-off on Wall Street earlier in the week and better-than-expected factory gate prices in Germany helped to push banks, car-makers and mining stocks higher.

In economic news, German producer prices climbed 0.4% in April from March, according to data published by Germany's federal statistics agency Destatis. This compared with economists' expectations for a 0.2% gain, according to a poll on investing.com. Prices were up by 3.4% from a year earlier, the fastest annual increase since December 2011, also surpassing economists' average forecast for 3.2%.

The US Department of Justice's appointment of former Federal Bureau of Investigations (FBI) director Robert Mueller to serve as special counsel to oversee the FBI's investigation into ties between President Trump's campaign and Russian officials on Wednesday was also seen as having contributed to the calming of markets and the renewal of appetites for riskier assets, such as equities, according to analysts.

US equity benchmarks had experienced a sell-off earlier in the week after a news report, published on Tuesday by the New York Times (NYT), claimed that a memo entry written by former director of the FBI James Comey, alleged that Trump had asked him to end an investigation into his former national security adviser Micheal Flynn in a meeting in February. The NYT, which said that it had not seen the memo but had been read parts of it by an unnamed associate of Comey, said that the White House denied the version of events in the memo, citing a statement from the White House which said: "the president has never asked Mr. Comey or anyone else to end any investigation, including any investigation involving General Flynn".

In equities, Hikma Pharmaceuticals fell 4.3% in London, making it the worst performer on Europe's benchmark STOXX 600 index, after the drugmaker lowered its revenue forecast for the full year citing delays in the launch of its generic version of asthma drug Advair Diskus. Also in London, gold miner Fresnillo advanced 2.4% and basic resources company Anglo American climbed 1.9%.

German utility RWE topped the chart in Frankfurt with a 2.2% gain and banks benefited from the return of risk appetite across the continent, with Barclays in London adding 2.4% and Commerzbank gaining 0.7% in Frankfurt. Credit Agricole and BNP Paribas rose by 1.1% and 1%, respectively, in Paris. Car-makers were also advancing, with Renault up by 1.1% in Paris, Volkswagen 1.2% higher and BMW gaining 1.1% in Frankfurt.

The pan-European STOXX 600 index gained 0.4% on Friday morning, still 1.3% lower on the week. The euro-region blue-chip STOXX 50 index was 0.4% higher, Frankfurt's DAX added 0.3% and London's FTSE 100 climbed 0.4%. Paris' CAC 40 gained 0.5%.

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