European Equity Benchmarks Close Higher; Financial Stocks Buoy Markets

The broad-based major European indices closed higher in Tuesday trading led by shares of investment firms, banks, and insurance companies.

In economic news, seasonally adjusted production in the construction sector increased 3.0% in the euro area (EA19) and 2.3% in the EU28 in February, compared with January, according to Eurostat, the statistical office of the European Union. In January, production in construction fell 0.8% in the euro area, and rose 0.6% in the EU28. Compared with February 2018, production in construction increased 5.2% in the euro area and 4.9% in the EU28.

The highest monthly increases in production in construction were recorded in Slovenia (+11.9%), Romania (+9.8%) and Poland (+7.0%), while decreases were reported in Spain (-0.9%), Czechia (-0.5%) and Finland (-0.3%). The highest annual increases in production in construction were in Hungary (+48.1%), Slovenia (+40.3%) and Poland (+15.1%), while decreases were seen in Spain (-4.7%) and France (-0.5%).

In the UK, the employment rate was estimated at 76.1%, higher than for a year earlier (75.4%) and the highest figure on record, according to the Office for National Statistics (ONS). The unemployment rate was estimated at 3.9%, which as its lowest since the period of November 1974 to January 1975. UK economic inactivity rate was estimated at 20.7%, down from 21.2% a year earlier, and tied for the lowest on record.

In Germany, the Deutsche Bundesbank reported that at the end of Q4 of 2018, the financial assets of households in Germany stood at EUR6.016 trillion ($6.8 trillion), a decrease of just over EUR28 billion compared with Q3 of 2018. It was the first decline in wealth in three years, and was attributable to significant valuation losses in the amount of around EUR88 billion, which more than offset the transaction-based acquisition of financial assets totaling just under EUR60 billion.

Currency and deposits, in particular, recorded the largest inflows along with claims on insurance corporations, which means households' preference for investment is perceived to be liquid and/or low risk persisted. Net financial assets fell by a total of EUR44 billion as liabilities grew by around EUR16 billion over the same period. Non-financial corporations' external financing -- which had been consistently positive over the past five years -- dropped to -EUR7 billion. This was due, in particular, to non-financial corporations scaling back their other liabilities, including trade credits and advances, by just over EUR21 billion.

Meanwhile, the Federation Statistical Office (Destatis) reported that at the beginning of 2018, 31% of the households in Germany owned a single-family house. Based on results of the sample survey of household income and expenditure, single-family houses continued to be the most frequent form of real property ownership, followed by freehold/owner-occupied dwellings (14%) and two-family houses (5%).

And in Italy, the Italian National Institute of Statistics' (Istat) reported that during Q3 of 2018, the residential construction units increased compared with the same period of the previous year (+8.8% for the number of dwellings and +9.9% for useful floor area). Non-residential buildings increased 6.7% in Q3 2018 compared with the same period in 2017. The number of dwellings in new buildings increased 6.4% in Q3 of 2018 compared with the previous quarter.

In equities, public relations firm WPP, and wealth manager St James's Place led the FTSE higher in London climbing 2.8%, followed by insurance company Prudential, and financial services firm Hargreaves Lansdown, which were up 2.7%. Travel company TUI was up 2.6%, while bookmaking company Paddy Power Betfair, and airline operator easyJet each closed 2.4% higher.

In Frankfurt, stock market operator Deutsche Borse, and internet company Wirecard led the DAX into positive territory rising 4.1% and 3.6% respectively, followed by industrial group Thyssenkrupp, which was up 2.3%. Semiconductor company Infineon, and reinsurance firm Munich Re climbed 2% each, while Deutsche Bank and footwear and apparel company Adidas in creased 1.7% and 1.5% .

And in Paris, banks helped lift the CAC higher as Societe Generale, BNP Paribas, and Credit Agricole rose 2%, 1.7%, and 1.4% respectively. Public relations firm Publicis Groupe led all gainers climbing 3.7%, followed by semiconductor company STMicroelectronics, and eyewear maker EssilorLuxottica, which were up 2.1% each.

The FTSE rose 0.44%, the DAX gained 0.67%, and the CAC-40 increased 0.36%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.