GLOBAL MARKETS-European stocks head for biggest rise in two months


Reuters

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh
    * European stocks open 0.8 percent higher, France
outperforms
    * Asia ex-Japan, Nikkei gain as risk appetite returns
    * Sterling little changed ahead of start of Brexit talks
    * Euro steady on Macron's French parliamentary majority win
    * Dollar muted after Friday's weak building, consumer data

    By Marc JonesLONDON, June 19 (Reuters) - European stocks headed for their
biggest rise in two months on Monday as investors snapped up
cut-price retail and tech stocks and France's shares and bonds
cheered a meaty parliamentary majority for pro-business
President Emmanuel Macron.
    Europe's banks jumped too following broker upgrades for
Credit Suisse [.EU], while there was little sign of tension for
the sector or for the pound <GBP=D3> or euro <EUR=EBS> as formal
Brexit negotiations kicked off in Brussels. [nL8N1JG16K]
    Projections showing that Macron had won a commanding
majority in France's weekend vote saw Paris stocks <.FCHI> make
a 1.1 percent gain as the country's bonds also outperformed in
fixed income markets. [GVD/EUR]
    "We expect the Macron reforms to transform France like the
Thatcher reforms had cured the erstwhile sick man of Europe, the
United Kingdom, some 35 years ago," said Berenberg European
economist Holger Schmieding.
    "And like the 'Agenda 2010' reforms had turned Germany from
one of the weakest into one of the strongest economies in Europe
almost 15 years ago."
    Asia had kicked off the week strongly as well with a
two-week closing high for Japan's Nikkei <.N225> and 0.3 - 0.7
gains for Australian <.AXJO> and South Korean KOSPI <.KS11>
    Chinese <.CSI300> and Hong Kong stocks <.HSI> jumped 1 and
1.2 percent ahead of a decision by index provider MSCI on
Tuesday, expected to see it add mainland-listed Chinese stocks
to its top share benchmarks for the first time. [nL1N1JA12M]
    Chinese data had also helped, with tight liquidity
conditions looking to have eased and home prices up 10.4 percent
in May from a year ago, although slowing from April's 10.7
percent gain. [nB9N1J501M]
    "Generally, the environment still remains fairly positive
for risk appetite," said Khoon Goh, head of Asia research at
Australia and New Zealand Banking Group in Singapore.
    Europe's retailers <.SXRP> also clawed back some ground
having been clobbered along with U.S. peers like Wal-Mart
<WMT.N> and Target <TGT.N> on Friday by net-giant Amazon's$13.7
billion deal to buy upscale grocer Whole Foods Market.
    It was Amazon's first major bricks and mortar acquisition in
the sector and spooked traders on worries it could now be going
hard after the traditional grocers. [nL3N1JD3Z4]

    BREXIT NEGOTIATIONS
    In the currency markets, the differing messages of the
world's major central banks on inflation and monetary policy
prodded the dollar higher against the yen ahead of a series of
appearances by U.S. Federal Reserve officials this week.
    Fed chief Janet Yellen's confidence as her team raised
interest rates for the third time in six months last week
surprised investors who had expected more caution about the
economy. [FRX/]
    Sterling also nudged higher at just over $1.28 <GBP=D3> and
87.42 pence per euro <EURGBP=D3> ahead of the formal start of
negotiations on Britain's planned exit from the European Union,
expected to generate plenty of headlines for the currency in the
weeks ahead.
    Brexit Secretary David Davis starts negotiations in Brussels
on Monday, which will be followed by a Brussels summit on
Thursday and Friday where Prime Minister Theresa May will meet -
but not negotiate with - fellow European Union leaders.
[nL8N1JF0YZ]
    Davis's agreement to Monday's agenda led some EU officials
to believe that May's government may at last be coming around to
Brussels' view of how negotiations should be run. May's own
political survival is in doubt after she lost her parliamentary
majority in an election this month. [nL8N1JE0JM]
    The euro was steady at $1.1195 <EUR=EBS>, retaining Friday's
0.5 percent gain. The dollar index <.DXY>, which tracks the
greenback against a basket of six global peers, was also little
changed at 97.182.
    The market is awaiting comments by New York Fed President
William Dudley, a close ally of Yellen's, when he speaks at a
business roundtable in New York state.
    "In the wake of Friday's weak U.S. data, Dudley could
provide insight into whether the Fed is still poised to continue
normalising monetary policy," said Masafumi Yamamoto, chief
forex strategist at Mizuho Securities in Tokyo.
    In commodities, oil futures lingered near six-week lows over
concerns about a supply glut amid faltering demand.
    U.S. crude <CLc1> slipped 0.35 percent to $44.58 a barrel,
while global benchmark Brent <LCOc1> dropped 0.3 percent to
$47.21.
    Gold touched a 3-1/2-week low earlier in the session and was
trading down slightly at $1,250 an ounce at 0900 GMT.

    For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets







 (Additional reporting by Nichola Saminather in Singapore,
editing by Ed Osmond)
 ((marc.jones@thomsonreuters.com; +44)(0)(207 542 9033; Reuters
Messaging: marc.jones.thomsonreuters.com@reuters.net  Twitter
@marcjonesrtrs))

Keywords: GLOBAL MARKETS/ (WRAPUP 4, PICTURE)



This article appears in: Politics , World Markets , US Markets , Stocks
Referenced Symbols: TGT , WMT


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