EUROPE MARKETS: European Stocks Finish Higher As Airbus, Commodity Shares Advance
February 15 2018 - 1:09PM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
Weaker dollar helps drive action, as traders regain appetite for
risk
European stocks on Thursday ended higher, with Airbus SE shares
soaring after a well-received financial update, as traders appeared
to regain their appetite for riskier assets.
Meanwhile, weakness in the dollar was encouraging investors to
load up on commodity-related shares.
Those moves were helping steer the regional equity market closer
to breaking a run of weekly losses.
How markets are moving
The Stoxx Europe 600 index rose 0.5% to end at 376.51, powered
in part by the basic materials group. On Wednesday, the
pan-European index rose 1.1% in a volatile session
(http://www.marketwatch.com/story/european-stocks-perk-up-after-german-growth-data-2018-02-14).
Germany's DAX 30 index finished up 0.1% at 12,346.17, while
France's CAC 40 index surged 1.1% to 5,222.52. The U.K.'s FTSE 100
added 0.3% to end at 7,234.81.
The euro bought $1.2488, up from $1.2452 late Wednesday in New
York.
In the fixed-income market, the yield on the 10-year German bund
was recently up by 2 basis points to 0.774%, according to
Tradeweb.
What's driving the market
Oil and mining sectors gained. The falling U.S. dollar aided
most commodities with dollar-denominated prices, such as copper and
oil . Crude oil prices were building on Wednesday's rally, which
was also bolstered by data showing a smaller-than-expected rise
(http://www.marketwatch.com/story/oil-prices-add-to-gains-after-best-day-in-months-2018-02-15)
in weekly U.S. crude inventories.
Stronger-than-expected U.S. inflation data
(http://www.marketwatch.com/story/cpi-surges-05-in-january-but-yearly-rate-of-inflation-unchanged-2018-02-14)
and rising Treasury yields initially lifted the greenback on
Wednesday, but that was accompanied by data showing an unexpected
drop in U.S. retail sales. Those mixed signals may have helped sink
the dollar, analysts said.
European stocks advanced even as the euro approached $1.25 for
the first time since early February, as the dollar dropped. Euro
strength can hurt sales of European products in overseas markets,
and in turn hurt shares of those exporters.
With one trading day left this week, the Stoxx Europe 600 was
looking at a weekly rise of 2.1%. That would mark the first win in
four weeks.
Check out:Here's why the U.S. dollar isn't getting much love
(http://www.marketwatch.com/story/heres-why-the-us-dollar-is-nobodys-valentine-2018-02-14)
What strategists are saying
"There was an appreciable initial knee-jerk push of dollar
strength [Wednesday], however this turned completely around as the
outlook showed inflation was beginning to turn a corner, but not
spiking higher in a sense that would have resulted in a massive and
sustainable risk-off move," said Richard Perry, an analyst at
Hantec Markets.
"Rising inflation in a controllable fashion is positive for
markets and retains an outlook of dollar negativity," Perry said in
a note.
Stock movers
Airbus SE shares (AIR.FR) rallied 10% in Paris. The European
plane maker said it's starting to reap the benefits of higher
production
(http://www.marketwatch.com/story/airbus-reaps-benefits-of-rising-plane-production-2018-02-15)
that helped it generate a higher-than-expected EUR2.95 billion
($3.68 billion) in free cash flow before mergers, acquisitions and
customer financing.
Nestlé SA (NESN.EB) fell 2.1% after the Swiss consumer goods
producer said a key measure of sales growth came in at 2.4% in
2017, the slowest pace in decades
(http://www.marketwatch.com/story/nestle-sales-growth-at-slowest-in-decades-2018-02-15).
The Stoxx Europe 600 Basic Materials index leapt 1.6%.
Within the group, miner Glencore PLC (GLEN.LN) popped up 1.5%,
and steelmaker ArcelorMittal SA (MT) rose 1.3%.
Financial company Standard Life Aberdeen PLC shares (SLA.LN)
dropped 7.5%. It said Lloyds Banking Group PLC (LLOY.LN) and
Scottish Widows have given notice to end the GBP109 billion
(http://www.marketwatch.com/story/standard-life-end-of-lloyds-scottish-widows-deal-2018-02-15)
($151.7 billion) investment-management arrangement that was reached
in 2014. Lloyds shares climbed 0.7%.
(END) Dow Jones Newswires
February 15, 2018 12:54 ET (17:54 GMT)
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