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European Stocks Edge Higher as Banks, Financial Services Providers Rally

European equities were trading higher on Wednesday morning as banks rallied following overnight gains on Wall Street and traders digested a ruling by Britain's supreme court regarding the nation's withdrawal process from the European Union.

Britain's supreme court ruled on Tuesday that the nation's government must seek parliament's approval before it invokes Article 50 of the Lisbon Treaty, which officially begins the exit process from the world's largest trading bloc. The decision came seven months after a narrow majority of Britons voted in a nationwide referendum to leave the EU, an outcome frequently referred to as "Brexit", prompting the resignation of former premier David Cameron and the appointment of Theresa May as his successor.

"Investors over in Europe are building up on the momentum which was passed by the US markets overnight," Naeem Aslam, chief market analyst at ThinkMarkets, wrote in a blog posting on Wednesday. "Markets had been waiting for Donald Trump's infrastructure spending proposal and he finally unleashed some details. Mr. Trump signed an executive order in extending the North Dakota pipeline. This will create thousands of more job and it will collect more tax revenue for the government."

On the Supreme Court's Brexit ruling, Aslam said that the timing for commencing the Brexit process and triggering Article 50 "is under a major threat" adding that he expected "the draft [Brexit proposal] is something which the parliament will fight with everything they have."

Oil prices were lower despite a drop in the value of the greenback. As a dollar-denominated commodity, a weaker US currency tends to make oil more affordable for international buyers. West Texas Intermediate crude oil, the main US oil benchmark, was trading 0.6% lower at $52.88 per barrel at the time of writing while Brent crude, the international gauge, was 0.5% lower at $55.14 per barrel.

And, in economic news, data published by Germany's federal statistics agency Destatis showed a 1.0% decline in new orders in the nations's construction industry in November compared to the previous month. The Munich-based CESifo Group's closely watched Ifo Business Climate Index, which is seen as a gauge of business sentiment among German managers, meanwhile, showed a slight contraction in January. The index fell to 109.8 points from a four year high of 111.0 points in December as companies indicated that they were less optimistic about their six-month business outlooks.

In equities, copper miner Antofagasta was leading on London's FTSE 100 Index, up by 4.1%, followed by equipment rental company Ashtead Group, up by 3.1% and building materials business CRH, up by 2.6%. Financial services provider Standard Chartered was 2.4% higher.

On Frankfurt's DAX, HeidelbergCement was up by 2.7%, followed by Deutsche Bank, up by 2.4% and Commerzbank, 2.1% higher. Semiconductor manufacturer Infineon Technologies was up by 2.0% and Thyssenkrupp, an industrial company, was up by 1.8%. And, on Paris' CAC-40, financial services providers BNP Paribas and SocieteGenerale led the gainers, up by 2.8% and 2.5%, respectively, while automobile manufacturer Renault was 2.1% higher and materials and packaging producer Compagnie de Saint-Gobain was up by 1.7%.

The Pan-European Stoxx 600 Index was 0.96% higher, London's FTSE 100 Index was up by 0.27%, Frankfurt's DAX was 1.19% higher and Paris' CAC-40 was up by 0.98% at the time of writing.

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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