EUROPE MARKETS: European Stocks End Higher, Reclaim Some Lost Ground After Rout
17 August 2018 - 02:32AM
Dow Jones News
By Ryan Vlastelica
Rise in commodity prices support gains in energy stocks
European stocks closed solidly higher on Thursday, in a partial
rebound from the previous session's sharp decline as Turkey's
currency crisis continued to show signs of easing, and the prospect
of new talks between the U.S. and China on trade gave some cause
for optimism on that front.
What did markets do?
The Stoxx Europe 600 rose 0.5% to 381.43. The rise comes after
the index's biggest one-day fall
(http://www.marketwatch.com/story/european-stocks-inch-higher-as-turkish-lira-extends-rebound-2018-08-15)
since June 25, as well as its third decline of the past four
sessions. The pan-European gauge is down 1.2% thus far this week,
on track for its third straight weekly drop, as well as down 2%
thus far in 2018.
Germany's DAX 30 rose 0.6% to 12,237.17, a partial recovery from
a 1.6% slump in Wednesday's session.
France's CAC 40 rose 0.8% to 5,349.02 in its first positive
session of the past five. The index suffered its steepest one-day
percentage drop since March 2 on Wednesday.
The U.K.'s FTSE 100 rose 0.8% to 7,556.38, putting an end to its
longest losing streak since February
(http://www.marketwatch.com/story/uk-stocks-gain-in-rebound-from-previous-sessions-drop-2018-08-16).
The euro rose slightly against the dollar, changing hands at
$1.1368, compared with $1.1347 late Wednesday in New York. Thus far
this year, the euro is down more than 5% against the buck.
What is driving the market?
In a potentially positive development, it was reported
(http://www.marketwatch.com/story/china-says-it-will-resume-trade-talks-with-us-2018-08-16)
that the Chinese Commerce Ministry would send a delegation to the
U.S. later this month to resume trade talks, the first such meeting
since July. The development comes at a period of elevated tensions
between the two countries, which are major trading partners and
which have been imposing tariffs on billions of dollars on each
other's goods over the past several months. The prospect of a trade
war has been one of the primary headwinds facing global equities of
late.
Recent trading has been driven by the economic crisis in Turkey,
which many investors fear could spread to other regions or hurt
European banks, many of which have exposure to the region.
The issue will likely continue to dictate market action in the
short term, and there are signs that the situation has stabilized.
On Wednesday, it was reported that Qatar would invest $15 billion
in Turkey
(http://www.marketwatch.com/story/lira-spikes-as-qatar-pledges-to-invest-15-billion-in-turkey-2018-08-15),
which could provide something of a lifeline.
The Turkish lira was on track for its third straight session
with a pronounced gain against the dollar, fueling hopes that the
recent all-time low represented a bottom. The lira gained 2.8% on
the dollar Thursday, bringing its week-to-date move against the
greenback to more than 11%. However, it is still down more than 15%
thus far in August.
Don't miss:Turkey's woes won't trigger a full-blown crisis
across emerging markets, economist says
(http://www.marketwatch.com/story/why-turkeys-crisis-doesnt-spell-doom-for-all-emerging-market-currencies-2018-08-14)
See also:How the lira selloff compares to Turkey's previous
crises
(http://www.marketwatch.com/story/how-the-lira-selloff-compares-to-turkeys-previous-crises-2018-08-14)
A recovery in commodity prices added to the positive tone on the
day. Brent-crude futures rose 0.5%, helping fuel a recovery in some
of the large-capitalization commodity stocks that were among
Wednesday's biggest decliners. BHP Billiton PLC. (BLT.LN) gained
1.6% in morning trading, while BP PLC (BP.LN) was up 0.5%.
What are market analysts saying?
"European shares are moving gingerly higher and the European
currencies are gaining some ground against the dollar as the focus
turns back to company news and earnings and away from the Turkish
lira, which has now stabilized against the dollar after the
onslaught early this week," said Fiona Cincotta, senior market
analyst at City Index.
What stocks are in focus?
Kingfisher PLC (KGF.LN) fell 4.8% after it reported its
second-quarter results
(http://www.marketwatch.com/story/kingfisher-q2-sales-grew-after-harsh-weather-in-q2-2018-08-16).
Rank Group PLC (RNK.LN) tumbled 2.8% after the company said its
annual profit fell sharply
(http://www.marketwatch.com/story/rank-group-shares-fall-after-results-2018-08-16),
citing tough conditions for its Grosvenor Casinos business, though
it said it expects to meet consensus expectations for the current
year.
Marshalls PLC (MSLH.LN) surged 14.4% after reporting its results
(http://www.marketwatch.com/story/marshalls-rises-after-reporting-revenue-growth-2018-08-16).
Germany's Henkel AG & Co. (HEN.XE)cut its 2018 earnings per
share growth guidance
(http://www.marketwatch.com/story/henkel-cuts-guidance-for-2018-adjusted-earnings-2018-08-16)
to between 3% and 6% and raised its adjusted EBIT margin guidance
to around 18%. After initially falling, shares ended with a gain of
less than 0.1%.
JC Decaux SA (DEC.FR) gained 7.1% after Berenberg upgraded the
stock
(http://www.marketwatch.com/story/jcdecaux-rallies-after-berenberg-upgrade-2018-08-16).
Among microcaps, Ashley House PLC (ASH.LN) jumped 10.9% after it
reported an increase in its annual profit
(http://www.marketwatch.com/story/ashley-house-rallies-after-results-outlook-2018-08-16)
that was partly driven by the reversal of a previous
impairment.
(END) Dow Jones Newswires
August 16, 2018 12:17 ET (16:17 GMT)
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