Markets

European stocks higher as investors weigh politics, DAX up 0.5%

Investing.com -

Investing.com - European stocks traded broadly higher on Monday as investors found optimism after another record close on Wall Street and weighed political developments.

Nearing midday in Europe, the benchmark Euro Stoxx 50 gained 0.46%, France's CAC 40 traded up 0.56%, and Germany's DAX 30 rose 0.47%.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe appeared to have established a quick friendship through a hug, a prolonged handshake and rounds of golf over the weekend, allaying investor fears of the meeting ending acrimoniously with Trump talking tough on trade, currency and security issues.

In Europe, Martin Schulz helped to take Germany's Social Democrats within one percentage point of Angela Merkel's conservatives, as a new poll finds he would beat the Chancellor in a direct vote.

In Asia, North Korea fired a ballistic missile into the sea on Sunday morning, the first such test since Trump was elected, sparking the U.S. President and Japanese Prime Minister to reaffirm their alliance.

On the economic front, Germany reported a 0.8% increase in wholesale prices in January, higher than expectations for a gain of 0.3%. Year-on-year registered a 4.0% rise which could fuel concern of inflation in the euro zone's number one economy.

The European Commission (EC) also released its latest economic forecasts, increasing its estimate for the euro area to grow 1.6% in 2017 from the prior projection of 1.5%.

The EC also raised its forecast for inflation in the region this year to 1.7% from the prior 1.4%.

On the company front, STADA (DE:STAGn) led the Stoxx 600 higher with gains of 14% on news that private equity group Cinven had offered €3.6 billion ($3.83 billion) to take over the German generic drug maker.

On the opposite side of the index, SAAB AB (BS:SAABBs) led the decliners with losses of more than 5% after the Swedish defense firm's fourth quarter profit missed consensus.

Meanwhile, oil prices were slightly lower on Monday, as investors reacted to increased drilling activity in the U.S. and waited for a monthly report from the Organization of Petroleum Exporting Counties (OPEC) for further evidence that crude producers are adhering to planned output cuts.

Oilfield services provider Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. increased by 8 last week, the 14th gain in 15 weeks.

That brought the total count to 591, the most since October 2015, and raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

Energy stocks were trading mixed, as French oil and gas major Total SA (PA:TOTF) inched up 0.04%, Italy's ENI (MI:ENI) advanced 0.21%, while Norwegian rival Statoil (OL:STL) lost 0.20%.

Financial stocks were also showing mixed trade, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) advanced 0.04% and 0.469%, while Germany's Deutsche Bank (DE:DBKGn) gained 0.11% but Commerzbank (DE:CBKG) slumped 1.77%.

Among peripheral lenders, Italy's Intesa Sanpaolo (MI:ISP) fell 0.28% but Unicredit (MI:CRDI) gained 0.79%, while Spanish bank BBVA (MC:BBVA) lost 0.23% and Banco Santander (MC:SAN) edged forward 0.08%

In London, the commodity-heavy FTSE 100 inched up 0.02% with mining shares showing strength as copper gained thanks to a strike by BHP Billiton's workers in Chile.

Shares in Glencore (LON:GLEN) advanced 1.96%, Anglo American (LON:AAL) rose 2.14%, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) gained 2.23% and 1.34%, respectively.

Energy stocks traded mixed, as BP (LON:BP) dropped 0.67% but rival Royal Dutch Shell (LON:RDSa) was up 0.05%.

Financial stocks were mixed as shares in HSBC Holdings (LON:HSBA) traded down 0.47% but the Royal Bank of Scotland (LON:RBS) rose 1.05%, while Barclays (LON:BARC) gained 0.367% but Lloyds Banking (LON:LLOY) slipped 0.09%.

In the U.S., Wall Street pointed a slightly higher open. The Dow Jones Industrial Average futures rose 0.15%, S&P 500 futures edged forward 0.08%, while the Nasdaq 100 futures added on 0.06%.

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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.


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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