By Barbara Kollmeyer, MarketWatch
Greek equities end with slight gains as country emerges from
bailout
European stocks closed higher on Monday, joining a global equity
rally as investors grew optimistic ahead of a week that includes a
major U.S.-China trade meeting and a gathering of global central
bankers.
Where are the major benchmarks trading?
The Stoxx Europe 600 rose 0.6% to 383.23. The move represents
something of a modest rebound from recent losses, coming after a
bruising 1.2% decline last week, its third straight weekly fall.
Recent losses have been pegged to concerns over Turkey's currency
crisis and sluggish commodity prices.
Opinion: If turmoil spreads in Europe, expect heavy flows into
U.S. stocks
(http://www.marketwatch.com/story/if-turmoil-spreads-in-europe-expect-heavy-flows-into-us-stocks-2018-08-18)
Germany's DAX 30 closed up 1% to 12,331.30, its biggest one-day
percentage gain since July 26. The index is coming off its third
straight down week, its longest such stretch since February.
Greece's ATHEX Composite Share Price Index rose 0.3% to
712.61.
France's CAC 40 gained 0.7% to 5,379.65 and the U.K.'s FTSE 100
rose 0.4% to 7,591.26.
Italy's FTSE MIB Index closed up 0.3% to 20,470.97.
The euro rose slightly against the dollar, changing hands at
$1.1447, compared with $1.1438 late Friday in New York.
What's driving the market?
An eight-year-long Greece bailout drama officially came to an
end on Monday, with European Commission Vice President Valdis
Dombrovskis congratulating Greece for emerging from out of the EU's
stability program. However, he also said the country needs "build
on this achievement by sticking to sound fiscal and economic
policies."
(https://twitter.com/VDombrovskis/status/1031435409711157248)
Read:Greece gets green light to exit bailout, but worries linger
(http://www.marketwatch.com/story/greece-likely-to-get-green-light-to-exit-bailout-program-but-worries-linger-2018-06-20)
But while Greece may have been viewed as a positive, albeit long
expected, the region could remain volatile amid worries about
Italy's economic and political situation. The single-currency bloc
will face a big test this autumn
(http://www.marketwatch.com/story/as-the-greece-bailout-ends-worries-shift-to-italy-2018-08-20)
when the new Italian government must present a budget. Italian
banks fell in early trading, but they subsequent recovered off
their lows of the day. Banco BPM SpA (BAMI.MI) ended down less than
0.1% and Unione de Banche Italiane SpA (UBI.MI) rose 0.7%.
Trade optimism lifted global equities, with U.S. stocks trading
near multimonth highs
(http://www.marketwatch.com/story/stock-futures-inch-up-putting-indexes-near-records-2018-08-20).
A report in The Wall Street Journal on Friday said negotiators on
both sides are mapping out talks
(http://www.marketwatch.com/story/stock-futures-inch-up-putting-indexes-near-records-2018-08-20)
aimed at resolving major differences by November.
Read: Investors may be underestimating the risk stocks face from
the midterm elections
(http://www.marketwatch.com/story/investors-may-be-underestimating-the-risk-stocks-face-from-the-midterm-elections-2018-08-20)
Investors remained watchful of a continuing currency crisis in
Turkey, with the battered lira weakening some again on Monday after
Turkey's sovereign credit was downgraded by both S&P Global
Ratings and Moody's Investors Service
(http://www.marketwatch.com/story/sp-global-moodys-both-downgrade-turkeys-sovereign-ratings-2018-08-17)
on Friday.
The Trump administration has rejected an effort by Turkey to
link the release of a U.S. pastor with relief for a major Turkish
bank facing billions of dollars in U.S. fines, according to a
report in The Wall Street Journal
(http://www.marketwatch.com/story/stock-futures-inch-up-putting-indexes-near-records-2018-08-20).
What are strategists saying?
"Markets often find it difficult to focus on one topic, and thus
with the focus now shifting away from Turkey and towards China, it
comes as no surprise that the pessimism of last week is fading into
obscurity," said Joshua Mahony, market analyst at IG, referring to
a meeting this week between the U.S. and China over trade.
But he warned of getting too hopeful over the meeting, given all
the previous ones have "shown precious few signs of anything that
looks like a breakthrough."
What stocks are in focus?
Driving gains for the DAX and the Stoxx 600 overall were shares
of Bayer AG (BAYN.XE) up 3%. The German multinational
pharmaceutical company tumbled 16% last week after a litigation
loss by Bayer-owned Monsanto in California
(http://www.marketwatch.com/story/bayers-stock-plunges-after-monsanto-ruling-2018-08-13)
over whether its herbicide Round-up is carcinogenic.
Oil names were moving higher as Brent crude prices stabilized.
Shares of Total SA (TOT) (TOT) rose 1%, as did BHP Biliton PLC
(BLT.LN).
BP PLC (BP.LN) (BP.LN) climbed 0.4%. Royal Dutch Shell PLC
(RDSA.LN) (RDSA.LN) added 0.7%.
Italian infrastructure group Atlantia SpA (ATL.MI) tumbled 4.7%
in Milan, as the government has reportedly began a formal move
(https://www.bloomberg.com/news/articles/2018-08-20/atlantia-sinks-as-italy-proceeds-with-revoking-toll-road-license)
to yank its toll-highway operation concessions after a highway
bridge collapsed in Genoa last week, killing at least 38. The
bridge was run by Autostrade per l'Italia, a unit of Atlantia.
G4S PLC (GFS.LN) fell 1.2% after the U.K. government took over
the operations of HMP Birmingham
(http://www.marketwatch.com/story/uk-government-to-temporarily-take-over-operations-of-g4s-prison-media-reports-2018-08-20),
a major prison run by the company, after an inspection found it was
in a "state of crisis."
(END) Dow Jones Newswires
August 20, 2018 12:24 ET (16:24 GMT)
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