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European Equity Benchmarks Close Higher as UK, EU Bicker Over Brexit

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The broad-based major European markets closed higher in Friday's trading session, as the U.K. continues to be in no hurry to leave the European Union, despite calls to exit as quickly as possible.

U.K. political leaders said they won't begin the official process to leave the European Union before the end of this year. Two front-runners that could succeed U.K. Prime Minister David Cameron said they would not trigger Article 50 soon, which formally begins a member country's separation process from the EU.

"We control the timing of when we trigger Article 50, and we will do it when we're good and ready," said Michael Gove, who announced his candidacy for prime minister on Thursday. The other front runner, Theresa May, made similar comments.

Ratings agency Standard and Poor's lowered its credit rating for the European Union as a result of U.K.'s decision to leave the Union. S&P cut its rating to AA from AA+, and said the U.K.'s Brexit vote has caused "greater uncertainty" over long-term economic and financial planning.

June saw a modest improvement in the performance of the U.K. manufacturing sector, according to the Markit/CIPS Purchasing Managers' Index (PMI). The score of 52.1, up from a revised reading of 50.4 in May, its highest level since January. However, the data collection window for the survey was between June 13 and June 27, so nearly all of the responses included in the final index readings were received prior to the U.K.'s EU referendum.

Manufacturing employment continued to decline in June as job losses were reported for the sixth straight month,

However, the recovery in the eurozone manufacturing sector gained momentum in June, according to Makit/CIPS. The final Markit Eurozone Manufacturing PMI posted a six-month high of 52.8 in June, up from 51.5 in May.

And according to by Eurostat, the statistical office of the European, the euro area seasonally-adjusted unemployment rate was 10.1% in May 2016, down from 10.2% in April 2016, and 11% in May 2015. It is the lowest rate recorded in the euro area since July 2011.

The EU28 unemployment rate was 8.6% in May 2016, down from 8.7% in April 2016 and from 9.6% in May 2015, which is the lowest rate recorded in the EU28 since March 2009.

In equities, mining firms and homebuilders led the FTSE into positive territory in Friday's trading session. Miner Fresnillo led the gainers, surging 7.1%, while Randgold Resources and Anglo American gained 4.3% each. Homebuilder Persimmon gained 6.4%, while Taylor Wimpey and Berkeley Group Holdings rose 5.3% and 5.2%, respectively.

On the Frankfurt exchange, automotive stocks helped buoy the DAX, led by automobile manufacturers Volkswagen, Bayerische Motoren Werke, and Daimler, which gained 4.9%, 3% and 2.3% respectively. Tire maker Continental rose 3.4%. Conglomerate ThyssenKrupp led all risers, moving up 5.6%, while national airline operator Deutsche Lufthansa rose 3.6%.

Automotive stocks also helped bolster the Paris bourse, as French automakers Peugeot and Renault rose 6.7% and 4.7%, respectively. Auto parts supplier Valeo gained 5.1%, while tire manufacturer Michelin was up 3.1%. Steel and mining giant Arcelormittal led al gainers, closing 7.6% higher.

The FTSE closed up 1.13%, the DAX rose 0.99%, and the CAC-40 ended higher 1.34%.

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

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

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