EUROPE MARKETS: European Stocks Gain And Trim Monthly Loss As Oil Companies, Deutsche Bank Rally
September 28 2016 - 7:49AM
Dow Jones News
By Sara Sjolin, MarketWatch
Embattled German bank strikes deal to sell insurance unit
European stocks posted firm gains on Wednesday, as a rally for
embattled Deutsche Bank AG sparked gains for banks and oil
companies rose ahead of a closely watched OPEC meeting in
Algeria.
The Stoxx Europe 600 index jumped 0.9% to 343.23, trimming its
monthly loss to 0.1%.
"European equity markets are positive, following oil prices
higher, as investors eye Algiers in the hope that today's OPEC
meeting will reach some compromise," said Rebecca O'Keeffe, head of
investment at Interactive Investor, in a note.
"Although an agreement to curb output today would be a major
surprise, the debate may pave the way for a potential deal at their
next meeting," she added.
West Texas Intermediate crude was up 1.5% at $45.33 a barrel,
while Brent added 1.9% to $47.36 a barrel. Market players are
shifting their focus to November
(http://www.marketwatch.com/story/crude-higher-but-market-faces-long-wait-for-next-opec-move-on-output-2016-09-28)
as the time when the Organization of the Petroleum Exporting
Countries could decide on a more definitive plan to curtail output
that has suppressed prices for two years.
The gains helped fuel optimism over Europe's commodity
companies, with shares of Total SA (TOT) (TOT) up 1.1%, BP PLC
(BP.LN) (BP.LN) rising 1.3% and Repsol SA (REPYY) 1.3% higher.
Deutsche Bank boost: Shares in Deutsche Bank (DBK.XE) (DBK.XE)
rose as much as 4% in Wednesday trade, before paring gains to
2.6%.
The move came after a report in Die Zeit that the German
government is working on a rescue plan for the bank
(http://www.marketwatch.com/story/german-government-preparing-rescue-plan-for-deutsche-bank-report-2016-09-28).
Germany's finance ministry, however, dismissed the story as
"false," according to reports.
Deutsche Bank Chief Executive John Cryan late Tuesday denied
reports that he had asked the government for assistance, telling
German newspaper Bild that a state rescue is "out of the
question."
The bank -- Germany's biggest -- earlier this week dropped to an
all-time closing low on reports the government was ruling out any
potential state aid for it.
Read:Deutsche Bank's woes not a Lehman moment, says UBS chairman
Axel Weber
(http://www.marketwatch.com/story/deutsche-banks-woes-not-a-lehman-moment-says-ubs-chairman-axel-weber-2016-09-28)
A deal to sell its Abbey Life insurance business to Phoenix
Group
(http://www.marketwatch.com/story/deutsche-bank-sells-abbey-life-for-12-billion-2016-09-28)
for EUR1.09 billion ($1.23 billion), also helped lift the bank's
shares on Wednesday.
"It seems that investors are choosing to focus on CEO John
Cryan's reassuring comments ... rather than the unsubstantiated
rumors currently flying around," said Connor Campbell, financial
analyst at Spreadex, in a note.
Deutsche's rebound on Wednesday fueled gains for the entire
sector, with shares of Banco Santander SA (SAN)(SAN) up 1.6%, BNP
Paribas SA (BNP.FR) rising 1.8% and Commerzbank AG (CBK.XE) 1.5%
higher.
Other movers: Shares in Royal Bank of Scotland Group PLC
(RBS.LN) (RBS.LN) rose 0.9% after the bank agreed to pay $1.1
billion
(http://www.marketwatch.com/story/rbs-pays-11-billion-to-settle-lawsuits-in-us-2016-09-28-34851318)
to a U.S. regulator to settle two lawsuits related to
mortgage-backed securities. The charge was within the amount RBS
set aside in provisions.
Also in London, Tui AG shares gained 1.4% after the travel
operator said it was confident of delivering between 12% and 13%
growth in underlying earnings
(http://www.marketwatch.com/story/tui-says-on-track-for-12-13-fy-earnings-growth-2016-09-28)
for the year that ends Sept. 30.
Deutsche Post AG (DPW.XE) added 0.8% after the courier company
said it is buying UK Mail Group for GBP242.7 million
(http://www.marketwatch.com/story/deutsche-post-strikes-deal-to-buy-uk-mail-2016-09-28)
($315.5 million).
Shares of Anheuser-Busch InBev NV (ABI.BT) (ABI.BT) rose 0.7% as
the brewing giant's shareholders approved all resolutions related
to its $100 billion-plus megamerger with rival SABMiller (SAB.JO) .
SABMiller shareholders also approved the deal
(http://www.marketwatch.com/story/sabmiller-shareholders-approve-ab-inbev-merger-2016-09-28-6485648),
helping send shares 0.5% higher.
Indexes: The U.K.'s FTSE 100 index rose 0.8% to 6,863.33
(http://www.marketwatch.com/story/ftse-100-breaks-3-day-losing-streak-as-oil-majors-rebound-2016-09-28),
with the oil majors helping the benchmark higher.
Germany's DAX 30 index advanced 1% to 10,467.88, while France's
CAC 40 index gained 1.1% to 4,445.84.
Economic news: European Central Bank President Mario Draghi
reiterated the need for structural reforms to boost economic
growth.
The central bank boss -- in a welcome address at an ECB
conference in Frankfurt -- also said the euro area needs "more
robust policy prescriptions" to promote growth.
(END) Dow Jones Newswires
September 28, 2016 07:34 ET (11:34 GMT)
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