EUROPE MARKETS: European Stocks Charge Higher As Airbus, Commodity Shares Advance
February 15 2018 - 4:29AM
Dow Jones News
By Carla Mozee, MarketWatch
Weaker dollar helps drive action, as traders regain appetite for
risk
European stocks on Thursday pushed higher, with Airbus SE shares
soaring after a well-received financial update, as traders appeared
to regain their appetite for riskier assets.
Meanwhile, weakness in the dollar was encouraging investors to
load up on commodity-related shares.
Those moves were helping steer the regional equity market closer
to breaking a run of weekly losses.
How markets are moving
The Stoxx Europe 600 index picked up 0.7% to 377.32, led by the
basic materials and oil and gas groups. But on the losing end were
the consumer goods and utilities sectors. On Wednesday, the
pan-European index rose 1.1% in a volatile session
(http://www.marketwatch.com/story/european-stocks-perk-up-after-german-growth-data-2018-02-14).
Germany's DAX 30 index was up 0.6% to 12,416.43, adding to
Wednesday's jump of 1.2%. France's CAC 40 index surged 1.2% to
5,228.83, extending Wednesday's rise of 1.1%.
Spain's IBEX 35 leapt 1.1% to 9,795.30. The U.K.'s FTSE 100 was
up 0.5% at 7,251.47.
The euro bought $1.2488, up from $1.2452 late Wednesday in New
York.
In the fixed-income market, the yield on the 10-year German bund
rose 2 basis points to 0.774%, according to Tradeweb.
What's driving the market
Investors appeared solidly on board to take on risk, with the
oil and mining sectors gaining. The falling U.S. dollar aided most
commodities with dollar-denominated prices, such as copper and oil
. Crude oil prices were building on Wednesday's rally, which was
also bolstered by data showing a smaller-than-expected rise
(http://www.marketwatch.com/story/oil-prices-add-to-gains-after-best-day-in-months-2018-02-15)
in weekly U.S. crude inventories.
Stronger-than-expected U.S. inflation data
(http://www.marketwatch.com/story/cpi-surges-05-in-january-but-yearly-rate-of-inflation-unchanged-2018-02-14)
and rising Treasury yields initially lifted the greenback on
Wednesday, but that was accompanied by data showing an unexpected
drop in U.S. retail sales. Those mixed signals may have helped sink
the dollar, analysts said.
European stocks advanced even as the euro approached $1.25 for
the first time since early February, as the dollar dropped. Euro
strength can hurt sales of European products in overseas markets,
and in turn hurt shares of those exporters.
With one trading day left this week, the Stoxx Europe 600 was
looking at a weekly rise of 2.4%. That would mark the first win in
four weeks.
Check out:Here's why the U.S. dollar isn't getting much love
(http://www.marketwatch.com/story/heres-why-the-us-dollar-is-nobodys-valentine-2018-02-14)
What strategists are saying
"There was an appreciable initial knee-jerk push of dollar
strength [Wednesday], however this turned completely around as the
outlook showed inflation was beginning to turn a corner, but not
spiking higher in a sense that would have resulted in a massive and
sustainable risk-off move," said Richard Perry, an analyst at
Hantec Markets.
"Rising inflation in a controllable fashion is positive for
markets and retains an outlook of dollar negativity," Perry said in
a note.
Stock movers
Airbus SE shares (AIR.FR) rallied 9.5% in Paris. The European
plane maker said it's starting to reap the benefits of higher
production
(http://www.marketwatch.com/story/airbus-reaps-benefits-of-rising-plane-production-2018-02-15)
that helped it generate a higher-than-expected EUR2.95 billion
($3.68 billion) in free cash flow before mergers, acquisitions and
customer financing.
Nestlé SA (NESN.EB) fell 2.4% after the Swiss consumer goods
producer said a key measure of sales growth came in at 2.4% in
2017, the slowest pace in decades
(http://www.marketwatch.com/story/nestle-sales-growth-at-slowest-in-decades-2018-02-15).
The Stoxx Europe 600 Basic Materials index leapt 2.5% and the
Stoxx Europe 600 Oil and Gas index charged up 1.2%.
Within the first group, miner Glencore (GLEN.LN) popped up 3.1%,
and steel maker ArcelorMittal SA (MT) rose 2.6%. Oil producer Royal
Dutch Shell PLC (RDSB.LN) (RDSB.LN) added 1.4%.
Financial company Standard Life Aberdeen PLC shares (SLA.LN)
dropped 4.6%. It said Lloyds Banking Group PLC (LLOY.LN) and
Scottish Widows have given notice to end the GBP109 billion
(http://www.marketwatch.com/story/standard-life-end-of-lloyds-scottish-widows-deal-2018-02-15)
($151.7 billion) investment-management arrangement that was reached
in 2014. Lloyds shares climbed 1.3%.
(END) Dow Jones Newswires
February 15, 2018 05:14 ET (10:14 GMT)
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