EUROPE MARKETS: European Stocks Snap 3-day Losing Run As Miners Jump On 'Turnaround Tuesday'
August 22 2017 - 11:46AM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
ZEW's German economic sentiment at 10-month low; Provident
Financial shares crash
European stocks pushed higher Tuesday, with investor optimism
returning ahead of the closely watched gathering of central bankers
in Jackson Hole, Wyo., later this week.
The Stoxx Europe 600 index jumped 0.8% to close at 375.80,
halting a three-session losing skid. The pan-European benchmark
fell 0.4% on Monday
(http://www.marketwatch.com/story/fiat-maersk-shares-shine-in-lackluster-european-stock-market-2017-08-21),
in part on concerns about another flare-up in tensions between the
U.S. and North Korea.
"'Turnaround Tuesday' is here again," said Chris Beauchamp,
chief market analyst at IG, in a note. "One day down, one day up,
and so on. This is the theme of August, with markets unable so far
to establish a direction and stick with it. After losses yesterday
the buyers have come back in, with fresh hope of moves on U.S. tax
reform apparently providing the catalyst for gains."
"Perhaps this time we will see stock markets extend their gains
into a second day; optimism surrounding Jackson Hole and potential
comments on monetary policy from the dynamic duo of Draghi and
Yellen could see Wednesday post a positive session as well," he
added.
Federal Reserve Chairwoman Janet Yellen and European Central
Bank President Mario Draghi are among top speakers in Jackson Hole,
with investors hoping to get hints on the future monetary policy
path from both institutions.
Miners: The pan-European benchmark was also lifted by upbeat
corporate updates from the mining sector, including from
heavyweights BHP Billiton PLC and Antofagasta PLC.
BHP shares (BLT.LN) (BHP.AU) (BHP.AU) ended up 2.1% after the
miner said it's planning to sell its onshore U.S. oil and gas
operations
(http://www.marketwatch.com/story/bhp-billiton-looks-to-sell-us-shale-operations-2017-08-21).
The decision followed a push by activist investor Elliott
Management in favor of the move.
BHP also said its final dividend will be increased threefold.
The miner swung to a yearly net profit of $5.86 billion, but that
was weaker than anticipated.
Antofagasta shares (ANTO.LN) jumped 2%. The copper miner more
than tripled its interim-dividend payment
(http://www.marketwatch.com/story/antofagasta-profit-surges-to-triple-dividend-2017-08-22)
after reporting a sharp rise in half-year earnings.
The share-price moves helped guide the Stoxx Europe 600 Basic
Resources Index higher by 1.7%, its best session in nearly a
week.
Gloom in Germany: European stocks held to higher ground even
after the release of a downbeat ZEW survey on German economic
sentiment
(http://www.marketwatch.com/story/german-economic-sentiment-drops-more-than-seen-2017-08-22).
The economic-expectations index came in at 10.0, down from 17.5 in
July and below the FactSet estimate of 15.0. That's the lowest
reading since October when the index was 6.2.
"The significant decrease of the ZEW economic sentiment
indicator reflects the high degree of nervousness over the future
path of growth in Germany. Both weaker than expected German exports
as well as the widening scandal in the German automobile sector in
particular have helped contribute to this situation," ZEW President
Achim Wambach said in a statement.
"Overall, the economic outlook still remains relatively stable
at a fairly high level," he said.
Read:Germany's DAX looks set to rebound from its summer slump,
says Capital Economics
(http://www.marketwatch.com/story/germanys-dax-looks-set-to-rebound-from-its-summer-slump-says-capital-economics-2017-08-22)
The euro drifted down to $1.1765, from around $1.1771 ahead of
the survey's release. The shared currency bought $1.1817 late
Monday in New York.
The ZEW survey arrived ahead of data due this week on German
manufacturing and services activity in August and the final look at
second-quarter gross domestic product. On Friday, the widely
watched business-climate survey from the Ifo Institute is due. Last
month, Ifo described German business sentiment as 'euphoric' and
businesses were optimistic about their short-term prospects.
Read:Why export powerhouse Germany is 'euphoric' even with a
soaring euro
(http://www.marketwatch.com/story/export-reliant-germany-euphoric-even-as-the-euro-soars-yes-heres-why-2017-08-09)
Also: German growth robust despite mild slowdown in Q2
(http://www.marketwatch.com/story/german-growth-robust-despite-mild-slowdown-in-q2-2017-08-15)
Stock movers: Provident Financial (PFG.LN) tumbled 66% after the
U.K.-based lender said it expects to lose between 80 million pounds
($102 million) and GBP120 million in the third quarter. The profit
warning
(http://www.marketwatch.com/story/provident-warns-on-profit-again-ceo-to-leave-2017-08-22),
the second in three months, comes after Provident shifted to using
full-time "customer experience managers," rather than self-employed
agents in its home-credit business.
National indexes: Germany's DAX 30 index rallied 1.4% to
12,229.34, and France's CAC 40 index rose 0.9% to 5,131.86.
The U.K.'s FTSE 100 index gained 0.9% to 7,381.74
(http://www.marketwatch.com/story/ftse-100-led-higher-by-miners-as-provident-plunges-almost-60-2017-08-22).
(END) Dow Jones Newswires
August 22, 2017 12:31 ET (16:31 GMT)
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