By RTT News, October 16, 2013, 11:56:00 AM EDT
(RTTNews.com) - The majority of the European markets ended Wednesday's session in positive territory. The markets bounced back from early losses on investor optimism that U.S. lawmakers will be able to strike a last minute agreement to avoid default. Senate leaders have expressed optimism that an agreement is within reach.
Fitch Ratings on Tuesday placed the U.S. government's 'AAA' sovereign debt rating under negative watch, citing the failure of authorities to raise the federal debt ceiling as the Treasury deadline closes in.
Economic recovery in the U.K. is likely gaining steam, Bank of England policymaker Spencer Dale said in remarks published on Wednesday.
"The good news is that after several years of virtual flat-lining, a recovery appears to be taking hold," the Monetary Policy Committee member said in a speech.
The economy expanded more than 1 percent in the first half of this year, which was faster than the previous two years put together, he noted. Dale expects the pace of growth to accelerate in the second half of the year.
Consumer price inflation in the U.K., which stayed unchanged in September, is set to fall back to the central bank's 2-percent target within the next few months and remain low thereafter, Capital Economics UK Economist Samuel Tombs said.
The slowdown in inflation would ease the squeeze on households' real earnings and cool investors' fears that one of the inflation knockouts to the MPC's forward guidance will be activated, the firm said.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.33 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.12 percent.
The DAX of Germany climbed by 0.47 percent and the FTSE 100 of the U.K. gained 0.34 percent. The CAC 40 of France dropped by 0.29 percent and the SMI of Switzerland fell by 0.03 percent.
In Frankfurt, Commerzbank climbed by 3.01 percent and Deutsch Bank added 0.94 percent.
HSBC upgraded Deutsche Post to ''Neutral'' from ''Underweight.'' The stock rose by 0.79 percent.
In Paris, LVMH sank by 4.63 percent. The luxury retailer reported third quarter sales that missed estimates. Christian Dior also lost 3.83 percent.
Danone dropped by 2.47 percent. The dairy giant cut its full year forecast to include the impact of some product recalls.
Publicis declined by 2.05 percent, after reporting quarterly revenues.
Peugeot decreased by 4.43 percent. The automaker's new passenger car registrations fell by 2.9 percent.
After cutting its annual sales forecast, Ubisoft Entertainment plunged by 26.15 percent.
In London, IMI advanced by 1.93 percent. The engineering group has agreed to sell its Retail Dispense business to an affiliate of Billionaire Warren Buffett'sBerkshire Hathaway Inc. for a cash consideration of $1.1 billion.
BT Group increased by 1.30 percent, after Goldman Sachs added the stock to its conviction list.
Dutch semiconductor equipment maker ASML reported a drop in third-quarter net income, while net sales improved from the prior year. The stock declined by 3.02 percent in Amsterdam.
Eurozone's foreign trade surplus fell more than expected in August, the latest data from the statistical office Eurostat showed Wednesday. The region's goods trade with the rest of the world resulted in a surplus of EUR 7.1 billion in August, down from a EUR 18 billion surplus in July. This was forecast to fall to EUR 10 billion. A year earlier, the surplus amounted to EUR 4.6 billion.
Eurozone inflation slowed to 1.1 percent in September as initially estimated from 1.3 percent in August, final data from Eurostat showed Wednesday. Inflation has remained below the European Central Bank's 2 percent ceiling.
Europe's new car registrations recovered in September with most major markets reporting growth from a year ago, the European Automobile Manufacturers' Association said Wednesday. The association said sales expanded 5.4 percent in September from the prior year, despite recording the second lowest level for a month of September. Sales totaled 1.15 million units compared to the record low volumes registered in September 2012.
Britain's jobless claims declined the most since 1997 in September as the strong economic recovery generated more jobs, adding to hopes of a faster-than-expected improvement in the labor market.
The claimant count declined by 41,700 to 1.35 million in September, the lowest figure since January 2009, labor market statistics published by the Office for National Statistics showed Wednesday. The monthly fall was the sharpest since June 1997 and exceeded consensus for a 25,000 fall.
Switzerland's economic confidence increased for the fourth straight month in October, to its highest level in the past three years, data from a monthly survey conducted by the Centre for European Economic Research and Credit Suisse showed Wednesday.
The ZEW-CS Indicator of economic expectations increased by 8.6 points in October to 24.9 points, marking the fourth consecutive improvement. The latest score was the highest in the past three years.
Homebuilder confidence in the U.S. unexpectedly decreased in the month of October, according to a report released by the National Association of Home Builders on Wednesday. The report said the NAHB/Wells Fargo Housing Market Index dropped to 55 in October from a downwardly revised 57 in September.
The decrease came as a surprise to economists, who had expected the index to come in unchanged compared to the 58 originally reported for the previous month.
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